Have faith in India, PM tells Korean business

Prime minister Manmohan Singh today said the government is keen to move forward with the 12 million tonne steel project of South Korea's Posco and that there has already been some progress in that regard.

While there may be some delays in the government process, he assured Korean business that there are effective mechanisms for resolution of problems and differences and a strong rule of law in India.

''I believe that India is a stable and profitable long term investment opportunity,'' he said while addressing a forum of CEOs in the South Korean capital of Seoul.

''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,'' he said.

India-Korea bilateral trade, meanwhile, has surged nearly 65 per cent to $20.6 billion in 2011, following the implementation of the comprehensive economic partnership agreement (CEPA) on 1 January 2010.

There is, however, a huge untapped potential, he said, adding, ''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.''

He thanked leading Korean chambers of commerce and industry for organising an interaction during his official visit to the country.

He also showered praise on the Korean people for the great economic and social progress they have achieved.

''Despite the downturn in the global economy, Korea has sustained one of the highest growth rates among the OECD countries. These achievements are due to the determination, solid hard work and spirit of enterprise of the Korean people,'' he noted.

India too is one of the fastest growing major economies of the world and has managed to maintain a growth rate of around 7 per cent despite the adverse international environment, he said.

''I am confident that the strong fundamentals of our economy will help us return to a sustained growth path of about 8-10 per cent per annum in the coming years,'' he added.

He also cited India's strong economic fundamentals like:

• Domestic savings rate which is 33–35 per cent of its GDP;
  
• A very young population, over half of which is working;
  
• Rising investments in agriculture, education and health;
  
• A growing middle class and a booming rural market;
  
• The huge expansion of infrastructure like sea ports, airports, railways, energy and roads;
  
• Its continuing strength in the knowledge economy;
  
• Huge investment opportunities to be achieved through both public and private investment and public-private partnerships;
  
• The increasing stress on green growth by increasing energy efficiency and the share of renewables, including solar and nuclear power in the energy mix.

He said these would offer large business opportunities to Korean business with 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.

He cited the examples of Korean giants like LG and Samsung, which are household names in India. Hyundai has a 25 per cent market share in India's domestic passenger car industry, he added.