President Park geun-hye shakes hands with Indian Prime Minister Narendara Modi as they hold a joint news conference following their summit talks at Cheong Wa Dae on May 18.  (Photo on the courtesy of Cheong Wa Dae)

Indian Prime Minister Narendara Modi, who is in Korea to drive the growth of the Indian economy, dubbed “Modinomics,” visited Korea and reached agreements on full-fledged economic cooperation with Korean President Park Geun-hye.

President Park held summit talks with Indian Prime Minister Modi at Cheong Wa Dae on May 18 and agreed to upgrade their bilateral relations to a “special strategic partnership.” The two also agreed to start negotiations to improve the Korea-India Comprehensive Economic Partnership Agreement (CEPA), which is considered a hindrance to brisk trade between the two sides due to a lower range of tariff reductions than Japan and other competitors. 

Korea decided to offer a $10 billion financing package to Indian Prime Minister Modi’s “Made-in-India Initiative” to attract large-size investments and nurture the Indian manufacturing industry. The financing package is composed of $1 billion in an Economic Development Cooperation Fund from the Ministry of Strategy and Financing and $9 billion in export financing from Korea Eximbank of Korea. Earlier, Prime Minister Modi received a promise from China to invest $20 billion into diverse arenas, including railway construction, irrigation technology assistance and cultural exchanges, while making an official visit to China. Prime Minister Modi’s business diplomacy efforts in Korea and China have paid off. 

"The adoption of a joint statement to change the Korea-India relationship into a special strategic partnership is the result of the two governments` will and effort," said President Park and Indian Prime Minister Modi during their joint press conference following their summit talks. 

"Over the past 42 years, the Korea-India relationship has made significant progress," said President Park. "In particular, the Comprehensive Economic Partnership Agreement (CEPA) between Korea and India took effect in 2010. It solidified the basis for our bilateral economic cooperation and contributed to an increase in the exchange of the arts and people." 

"Today, Prime Minister Modi and I discussed ways to expand bilateral cooperation on various issues to further deepen our existing relationship," said President Park. "I am very glad that Prime Minister Modi and I were able to adopt a joint statement for the Korean-Indian `special strategic partnership,` based on a dialogue that, starting today, will open a new era of our bilateral relationship." 

A plan to construct infrastructure in India, released by Cheong Wa Dae, calls for the construction of 100 “smart cities” for a combined $15 billion; Delhi-Mumbai industrial corridor project worth $90 billion; the railway infrastructure construction project worth $140 billion for the next five years; and the Ganges River purification project. The value of orders amounts to a combined $200 billion. 

“Modinomics calls for aggressive attracting of foreign direct investments, constructing of infrastructure, and nurturing of manufacturing industries, and taking its cue from the Miracle of the Han River, India’s infrastructure projects will likely become a win-win strategy for Korean companies,” a Cheong Wa Dae official said. Prime Minister Modi reportedly asked for the Korean government and companies to build an LNG carrier shipbuilding plant in India. The Korean side inaugurated a government-private sector task force on shipbuilding cooperation between the two countries. It will be headed by a director general, and they agreed to allow Korea’s participating in the construction of nine LNG carriers ordered by state-run Indian Gas Corp. Modi is to tour the shipyard of Hyundai Heavy Industries on May 19 before returning home. 

The two sides also agreed on ways of enhancing cooperation in the aerospace sector by promoting ties between the Indian Space Research Organization and the Korea Aerospace Research Institute. 

On the security front, the leaders denounced Pyongyang’s development of nuclear weapons and ballistic missile programs, stating that such moves are in violation of its international obligation and commitments.

They also reaffirmed their commitment to eradicate terrorism to ensure world peace and stability. On culture, the two sides agreed to jointly produce film and TV content and promote human exchanges to get a better understanding of each other.