SEOUL (REUTERS, AFP) – South Korea and India agreed on Monday to step up defence cooperation while South Korea pledged US$10 billion in finance for infrastructure projects as Indian Prime Minister Narendra Modi arrived for a visit.
South Korea’s Ministry of Strategy and Finance and the Export-Import Bank of Korea will create a US$1 billion Economic Development Cooperation Fund and provide US$9 billion in export credits to India, the two countries said in a statement.
Modi signed the deal with South Korean President Park Geun-hye at the beginning of a two-day visit to Seoul.
Seven out of 10 points in the joint statement were focused on defence cooperation including exchanges between South Korean and Indian shipyards, and their navies.
“I have requested President Park to support the participation of Korean companies in the defence sector in India. Her response has been positive,” Modi said in remarks at a joint news briefing with the South Korean president.
Modi arrived from Mongolia and earlier visited China on a three-country Asian tour aimed at building economic ties.
The trip - part of a six-day East Asia tour - is packed with a whirlwind of meetings with business tycoons from South Korea's largest conglomerates, including Hyundai, Samsung and LG. All three manufacturing giants operate plants in India where they enjoy sizeable shares of the vast consumer market for cars, smartphones and home appliances.
Modi has been active diplomatically since taking office a year ago, and has made a point of forging closer relations with countries on China’s periphery – a move seen by some observers as a response to China’s own strategic relations with India’s neighbours.
Modi is looking to secure promises of bigger investments as part of his "Make In India" initiative, aimed at fostering the nation's relatively weak manufacturing sector. India also needs help upgrading its outdated transport infrastructure - a constant source of frustration among foreign firms operating there.
On Tuesday, Modi is scheduled to visit the main shipyard of the world's largest shipbuilder, Hyundai Heavy Industries, in the southern city of Ulsan and to meet with its chairman Choi Kil Seon.