India and South Korea will collaborate in the growing global Artificial Intelligence (AI) market and build partnerships between Indian IT companies, traditionally strong in software, and Korean engineering and hardware companies, according to Indian foreign ministry officials who asked not to be identified.
South Korean president Moon Jae-in is in India on a four-day trip and scheduled to hold talks with Prime Minister Narendra Modi on Tuesday.
South Korea also approved $10 billion in soft loans for infrastructure projects in India that it first committed to during Modi’s visit to Seoul in 2015, the officials quo- ted above also said, adding that India will have to identify projects where the loans will be used.
The two sides are also expected to sign an early harvest agreement as part of the upgraded Comprehensive Economic Partnership Agreement (CEPA) to boost bilateral trade way beyond the existing $20 billion by including more items including exports of marine products from India, the officials said. An early harvest scheme is a precursor to a free trade agreement (FTA) between two trading partners.
Although the currency swap agreement, which will help India bridge the $10 billion trade deficit, is work in progress, South Korea, India and Afghanistan will sign a tripartite agreement that allows Indian companies to fulfil Seoul’s development and infrastructure commitments to Kabul.
On Monday, the PM escorted President Moon Jae-in to Gandhi Smriti; the two leaders later jointly inaugurated Samsung’s largest mobile manufacturing facility in Noida that will produce 10 million mobile phones each month from 2020. India’s commerce ministry is still considering whether it should give designated export oriented status to the unit.
In the past two-and-half years, Korean foreign direct investment of around $3.5 billion has come India’s way and bilateral trade is up by 30%. South Korean auto firm Kia Motors’ project in Andhra Pradesh is expected to start production next year. Kia is an affiliate of Hyundai. Another Korean firm, Hyosung is investing an additional $500 million in technical textiles in India.
While both sides have traditionally played down their defence ties, a South Korean self-propelled air defence gun missile system is under field evaluation and trials in India as part of the competitive bidding process. South Korean close quarter combat weapons and small arms are also on offer to the Indian defence ministry. The Koreans are willing to fully transfer technology and manufacture the products under “Make in India” route.
“The Indian and South Korean relationship is a classic example of the convergence of New Delhi’s act east policy and South Korea’s southern policy. With PM Modi paying personal attention to the relationship, bilateral trade can touch $ 50 billion by 2020,”said a senior official.
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