India-South Korea Current Affairs

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India-South Korea sign Agreements to Push Infrastructure Development and Bilateral Trade

India and South Korea has signed an agreement for $10 billion assistance for infrastructure development projects in India, including smart cities. It includes $9 billion in concessional credit and $1 billion in Official development assistance (ODA). Part of this fund will be utilised towards Smart City projects in India. With this agreement, South Korea has become one of the first non-G-7 countries to become an ODA contributor in India.

The agreements were signed during the four-day official visit of Finance Minister Arun Jaitley to South Korea to attend the fifth India-Korea Financial Dialogue.

South Korea strives to diversify its economic partnerships and India being world’s fastest growing major economy offers immense opportunities to Korea for diversifying its economic partnerships. This also offers India great opportunities. Both the countries have also decided to establish a mechanism at senior official levels to identify good infrastructure projects in India to make use of the funding.

In the face of rising protectionism, the two countries have also agreed that there is an urgent need for them to increase efforts to stimulate investment flows, support for infrastructure development, and bilateral trade among others

Background

The present engagement between India and South Korea comes under the overall umbrella of the ‘Special Strategic Partnership‘ as declared in the Joint Statement of the Prime Ministers of both the nations in May 2015. Also, recently, a MoU was signed between both the countries for defence industry cooperation in shipbuilding.

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India-South Korea sign MoU on shipbuilding

A MoU has been signed between India and South Korea for defence industry cooperation in shipbuilding. Under the MoU, the two countries would recommend the organisations for collaborating in the implementation of specific projects. The MoUs signed will be valid for a time period of 5 years and are automatically extendable for further successive five years at a time.

While South Korea is yet to name its recommended organisation, India has nominated Hindustan Shipyard Ltd (HSL), Visakhapatnam for the collaboration.

HSL and the nominated shipyard by South Korea will find and develop indigenous sources for the supply of majority of the material and equipment for the construction of the warship. HSL has already teamed with Hyundai Heavy Industries to build five fleet support ships and two strategic operating vessels.

In addition to the above project, Kangnam Corporation of South Korea is slated to provide consultancy, design and technological assistance to India’s state-owned Goa Shipyard Limited in building 12 mine countermeasures vessels.

Significance

The cooperation is part of the ‘Make in India’ policy. Accordingly, the warships will be built at domestic shipyards with the help of South Korea. This will enable HSL to upgrade and modernise its facilities and finish shipbuilding projects in a timely and cost effective manner. It would be able to imbibe best practices in shipbuilding. As a result of which, the production of HSL will increase manifold leading to the creation of more employment opportunities to the unemployed.

In addition, the plan to identify and develop indigenous sources for the supply of material and equipment would pave way for the development of ancillary industry /maritime cluster in the region.

Background

The partnership was conceived under the overall umbrella of the ‘Special Strategic Partnership‘ as declared in the Joint Statement of the Prime Ministers of both the nations in May 2015. Subsequently, the two countries agreed to encourage co-operation between their shipyards in the defence sector.

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India, South Korea launch Korea Plus platform to promote investments

India and South Korea have launched a platform ‘Korea Plus’ to promote and facilitate Korean Investments in India.

It was launched by the Union Commerce and Industry Minister Nirmala Sitharaman and her South Korean counterpart Joo Hyunghwan in New Delhi.

Key Facts

  • The mandate of Korea Plus platform covers the entire investment spectrum including supporting Korean enterprises entering the Indian market for the first time.
  • It will be also looking into issues faced by Korean companies doing business in India and policy advocacy to the Indian Government on their behalf.
  • It shall comprise a representative each from the South Korean Ministry of Industry, Trade and Energy (MoITE) and Korea Trade Investment and Promotion Agency (KOTRA). Besides, it also includes three officials from Invest India.

Background

A Memorandum of Understanding (MoU) for establishing Korea Plus was signed between two countries in January 2016. The MoU was an outcome of the official state visit of Indian Prime Minister Narendra Modi to South Korea in May 2015.

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