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Koreans list hurdles to investment plan

Calcutta, Nov. 12: Korean companies are keen on making India a sourcing base but redtapism and procedural delays are holding them back

“So far, only large companies like LG, Samsung and Hyundai have invested in India. But many more — especially small and medium enterprises — are interested in setting up manufacturing bases in India. But it’s difficult to get clearances from the authorities here,” said Seok Kap Kang, director general of the Korea Trade Centre — an arm of the Korean embassy.

Kang cites two examples. “One (Korean) company had told us it took six months to obtain clearances to fell a tree that stood on the land that it had acquired.

“Posco — the largest steel manufacturer in Korea — has been importing iron ore from India for the last three-four years.

“It imports iron ore worth $100 million every year. It wants to import more, but cannot for want of port infrastructure.”

“India could become a sourcing base for a large number of Korean companies. Average wages in Korea are ten times in India. Plus we don’t have natural resources,” Kang said.

“Resource Development Corporation, a Korean government-promoted company, has approached the Indian government with a proposal to invest in iron ore and coal mining in India.

“The company is studying the feasibility of the project at present,” he said.

The Indian government, however, has not approved private investment in commercial mining of coal as yet. The Korean firm could invest in India only if Delhi allowed private players in coal mining.

“Seoul wants to strengthen trade relations with Delhi, and our minister for commerce would visit India in December. We expect the ministers to discuss a free-trade agreement during the meet,” Kang added. Arun Jaitley, the Union commerce minister, had visited Korea in the recent past.

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