India's environment clearance to the Rs 52,000-crore (Rs 520-billion) Posco steel project will inspire other big companies to invest in the country, Korea said on Friday.
"When the Posco project in Orissa kicks off on full scale, it would inspire other large conglomerates in Korea to channelise investible funds into India," South Korean President Park Geun-hye said.
Addressing Indian industry bodies here, she called for liberalising visa regime and improving business cooperation among small and medium enterprises to create more jobs in India as well as South Korea.
Referring to the Comprehensive Economic Partnership Agreement, signed in 2009 and operationalised in 2010, she said there is a need to negotiate it with authenticity to help businesses from the two sides to reap the benefits of CEPA.
"Since the operationalisation of CEPA, trade in volume terms has risen 70 per cent but the agreement leaves much to be desired. Its content does not match with that of other FTAs," Geun-hye said.
There is enough potential to raise the level of trade and investment to much higher levels through optimum utilisation of the CEPA and liberalisation of the visa regime for greater people-to-people contacts, he added.
The Commerce Ministry earlier this week commissioned a study to assess the impact of free trade agreement with South Korea, with which India had a trade deficit of about $9 billion in 2012-13.
"We have put in place single window approval mechanisms and Korean industries should look at investing in the upcoming industrial townships.
“Koreans should come in chip manufacturing. “We have liberalised FDI regime in civil aviation, telecom. Korean businesses can benefit from the new policy regime," Sharma said.
Sharma said the National Investment and Manufacturing Zones will address the issues that delayed the Posco project and it would now be easier for Korean companies to set up units in NIMZs than earlier.
South Korean giant Posco won environmental clearance to build a Rs 52,000-crore (Rs 520-billion) steel plant in Odisha earlier this month, ending eight years of wait for a project that would involve the largest-ever foreign direct investment in India.
The bilateral trade is in favour of South Korea.
Trade deficit increased from $5.1 billion in 2009-10 to $8.89 billion in 2012-13.
The total trade last fiscal was at $17.3 billion.