India and Korea pledge $10bn to infrastructure cooperation

India’s Ministry of Strategy and Finance and Korea’s Export-Import Bank have announced they would provide $10 billion for mutual cooperation in infrastructure, allocating $1 billion to their Economic Development Cooperation Fund and the remaining $9 billion to export credits for sectors including smart cities, railways and power generation and transmission.

Commencement of negotiations to amend the 2010 India-Korea comprehensive economic partnership agreement (CEPA) is scheduled for June 2016, with a view to achieving qualitative and quantitative increase of trade through an agreed roadmap, according to a joint statement issued after their meeting in Seoul earlier this week.

The two governments and the export-import banks of both countries will hold consultations to draw a roadmap for their joint programme.

Mutual cooperation opportunities enabling cities with updated technologies including smart grids will be sought after, in view of their crucial influence on improving the quality of residential environments and achieving sustainable economic development, the signing parties said in a statement.

Recognising that Saemaul Undong (SMU), Korea’s successful rural development initiative in the 1970s, has a potential to make a substantial contribution to pursuing the objectives of India’s Swacch Bharat Abhiyan campaign, both representatives agreed to promote cooperation to create synergies by ‘combining development experiences’.

Building on the acknowledgement of the link between economic growth, preservation of environment and clean energy, India and Korea agreed to enhance exchanges between their respective ministries and agencies. India’s Ministry of Power and Korea’s Ministry of Trade, Industry and Energy subsequently signed a memorandum of understanding (MoU) calling for cooperation in the field of electric power development and new energy industries.

Similarly, lauding the Korean Green Economy initiative, India expressed willingness to work with Korea for mutually beneficial partnerships in deploying innovative policies and technologies to improve urban water and air quality and protect natural resources.

Companies operating in shipbuilding will be enticed by both governments to cooperate in this field, starting with the construction of Indian vessels such as LNG carriers, as India looks to modernise its industry with the help of Korean expertise.

Modi and Park discussed the need for stable maritime transport and possible joint business projects in the area of shipping and logistics as well as the promotion of employment of both countries’ seafarers.

Negotiations paved the way for an MoU between India’s Ministry of Shipping and Korea’s Ministry of Oceans and Fisheries calling for cooperation in the fields of maritime transport and logistics.

Cooperation between India’s National Security Council Secretariat and Korea’s Office of National Security was also sealed in an MoU, as well as the agreement to set up a framework of cooperation in the field of road transport and highways between India’s Ministry of Road Transport and Highways and Korea’s Ministry of Land, Infrastructure and Transport.