Seoul:
Investment from South Korea is a "priority" for India, visiting Prime Minister Manmohan Singh said on Monday, adding that the government was taking "proactive" steps to improve the business climate and move forward with the POSCO mega steel plant project in Orissa that has been plagued by farmer protests.
"Investment from Korea is a priority for India. We will take pro-active steps to address investor grievances and improve the business climate in the country. Many states of our Union have been actively encouraging foreign investment and we will support these efforts. I urge Korean industry to have faith in India," Dr Singh said in his address to South Korean CEOs during his two-day official visit to this country.
"I recognise 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 government is keen to move forward with the POSCO project and there is some progress in this regard. I believe that India is a stable and profitable long-term investment opportunity," he told the 20 CEOs, including those of Hyundai and Samsung, who attended the meeting.
The POSCO steel project, India's largest foreign investment project estimated at $12 billion, has been hobbled for years by local protests against land acquisition of over 4,000 acres in Paradip in the eastern coastal state.
The POSCO issue had figured in the joint statement issued after the Summit talks Sunday between Manmohan Singh and South Korean President Lee Myung Bak, which noted that there had been progress forward on issues like land acquisition.
This is the third time in two days that Manmohan Singh has spoken of how much India values South Korean investments.
Noting that many South Korean companies have become a household name in India, Manmohan Singh said on Sunday he hoped to see many more, particularly from the medium and small sectors, setting up shop there.
"I invited Korean firms to invest in India in a big way. Companies such as LG, Hyundai and Samsung are already household names in India. We would like to see small and medium sized Korean companies also making India a base for their manufacturing," the prime minister said at a joint media interaction with President Lee after their Summit.
"I informed President Lee that India is making a huge effort in upgrading our physical infrastructure. We want Korean companies to help us realize this objective and benefit from the opportunities provided by this," Manmohan Singh added.
He again referred to the Korean companies during his speech at a lunch hosted by President Lee.
At the CEO's meeting, to illustrate why India was such an attractive investment destination, Manmohan Singh noted that the country had managed to maintain a 7 percent growth rate in the last few years and listed six fundamentals that would enable it to return to 8-10 percent growth in the coming years:
- A domestic savings rate of 33-35 per cent of GDP and growing,
- A very young population, with half of the working population in its twenties,
- Heavy investments in education, health and agriculture to give a new deal to rural India. Rural markets are booming and the middle class is growing rapidly.
- Huge expansion in higher education and skills and development of ports, airports, railways, energy and roads. India is poised to continue to be a frontline player in the global knowledge economy.
- Ambitious plans for the development of physical infrastructure. Planning to secure investment of almost $1 trillion in the next five years in new projects in highways, power plants, mass transport systems, ports and airports. This will be achieved through both public and private investment and Public-Private Partnerships.
- Determined to pursue a strategy of green growth. Committed to increasing energy efficiency and the share of renewables, including solar and nuclear power, in the energy mix. There will be large business opportunities and I am aware of Korean capabilities in environmentally friendly technologies.
"Korean companies have always recognised these strengths and competitive advantages of the Indian economy. They were among the early investors to look at India as a strategic investment destination," Manmohan Singh said, adding that Hyundai has a 25 percent market share in India's domestic passenger car industry.
Noting that after the implementation of Comprehensive Economic Partnership Agreement (CEPA) on January 1, 2010, bilateral trade has surged by roughly 65 percent in two years and reached $20.6 billion in 2011, the prime minister said: "However, it is still below its huge untapped potential."
"Therefore, President Lee and I decided yesterday to revise the bilateral trade target to $40 billion by 2015. This is a challenge as well as an opportunity that we must both seize together," Manmohan Singh added.