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
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.