Posco to have multiplier effect on investments from Korea: visiting President

Manmohan Singh says grant of mining concession also at an advanced stage of processing

A day after New Delhi assured Seoul of soon giving all clearances to the $12 billion Posco project in Odisha, visiting  South Korean President Park Geun-hye today said operationalisation of the delayed integrated steel plant will trigger much large scale investments into India from her  country.   

"When Posco kicks off in full scale, it would provide a momentum to other large scale  investments," the Korean president said while addressing industry chambers.

Prime minister Manmohan Singh had said yesterday that the Posco  project in Odisha is set to be  operational in the coming weeks, following the revalidation of its environmental  clearance.

"Grant of mining concession for the project is also at an advanced stage of processing,” Singh had said.

The integrated steel plant by the South Korean firm is the biggest foreign direct investment (FDI) India has ever received. Fate of the project has been hanging in balance since  2005 as it got entangled in several regulatory and environment-related hurdles.

Also  addressing the chambers, Commerce & industry  minister Anand  Sharma said  national investment  and manufacturing zones address the issues that caused delay in the Posco project, inviting  south  Korean  firms  to set up units in these large  zones.  

"It would be now easier for Korean  companies to set up manufacturing units  in NIMZs than earlier," he said.

He asked Korean companies to come to invest in critical areas like IT sector, including chip manufacturing.   

Informing Korean  businessmen about recent liberalisation in foreign direct investment in sectors  such as civil aviation and telecom, Sharma  asked them to take benefit  of these changes.

Park said  though bilateral  trade  between India and Korea  rose  70 per cent in volume terms after comprehensive economic partnership agreement (CEPA) was signed, the contents  of the pact were not as exhaustive as other free trade agreements. "It leaves much to be desired," she said, urging for revising it with authenticity to help businesses from the two sides to reap the benefits of CEPA.

India and Korea have agreed  to revise CEPA to cover not only goods, but also investments and services. The first round of talks for this will be held in Seoul during the first half of this year.

India is concerned at the heavily tilted balance of trade in favour of Korea. The deficit with South Korea increased from $5.1 billion in 2009-10 to $8.89 billion in 2012-13.