India and South Korea agree to try and push the trade turnover to $40 billion by 2015

Making a pitch for greater investment from South Korea, Prime Minister Manmohan Singh told a gathering of leading businessmen here that the Indian economy had strengths that they could take advantage of and that they must “have faith in India” notwithstanding the delays which have plagued projects like that of POSCO.

“I recognize that sometimes our processes can be slow but there are effective mechanisms for resolution of problems and differences and a strong rule of law,” the Prime Minister told the CEOs, who included the heads or senior representatives from KPCO, Ssanyong, Hyundai and Samsung. “The government is keen to move forward with the POSCO project and there is some progress in this regard.” He also promised “proactive steps to address investor grievances and improve the business climate” in India, adding that many States of the Union “have been actively encouraging foreign investment and we will support these efforts.”

India and South Korea implemented their Comprehensive Economic Partnership Agreement (CEPA) in January, 2010, following which there has been a huge surge in bilateral trade. In 2011, trade turnover stood at $20.6 billion, up by around 65 per cent over a two-year period.

On Sunday, Prime Minister Singh and President Lee Myung-Bak agreed to try and push this figure to $40 billion by 2015.

In his sales pitch to the Korean executives, the Prime Minister highlighted six competitive advantages that India had. Its domestic savings rate is about 33-35 per cent of GDP and growing; it has a very young population with half its working population in its twenties; the government had invested heavily in education, health and agriculture “to give a new deal to rural India” whose markets were booming as a consequence, he claimed; the country's education and skill development infrastructure has expanded hugely; an ambitious one trillion dollar plan for developing physical infrastructure via public-private partnerships over the next five years is in the works; and a strategy of “green growth” would now be pursued. “We are committed to increasing energy efficiency and the share of renewable, including solar and nuclear power, in our energy mix,” he said. “There will be large business opportunities and I am aware of Korean capabilities in environmentally friendly technologies.”