By Chang Jae-soon
NEW DELHI, Jan. 16 (Yonhap) -- South Korea and India agreed Thursday to upgrade their free trade pact as early as possible to further bolster bilateral trade and investment, a deal that would open the world's second-most populous nation wider to Korean firms.
The agreement to revise the comprehensive economic partnership agreement, or CEPA, was one of the highlights in the joint statement issued after the summit between South Korean President Park Geun-hye and Indian Prime Minister Manmohan Singh.
The trade pact was signed in 2009 and went into effect the following year.
South Korea has called for revising the agreement, complaining its level of liberalization is lower than that of similar accords India has with other nations, especially Japan, which makes Korean firms in India less competitive than their Japanese rivals.
Thursday's agreement to upgrade the pact is seen as a victory for South Korea because India has been reluctant about Seoul's calls for a revision due mainly to concerns that its trade deficits could grow.
"The two leaders reaffirmed the need to increase trade in goods and services and investment through the upgrading of the CEPA and agreed to make every effort to complete the process at the earliest," the joint statement said. "To this end, the trade ministers of both sides will meet in the first half of this year in Seoul."
Though no timeframe for a revision was set, India appears to be committed to an early revision.
During the summit, India's industry minister reported to Singh that the CEPA can be expanded in many sectors, including mining, electronics, automobile and auto parts. Such a specific mention of industries shows India is committed to a revision, said Cho Won-dong, senior economic secretary to Park.
Park arrived in New Delhi on Wednesday for a four-day state visit.
Officials said the trip is part of Park's "sales diplomacy" drive aimed at using diplomatic trips and meetings to advance the country's economic and business interests. It is Park's first overseas trip this year, coming weeks after she announced her ambitious three-year plan to boost the economy.
Thursday's summit also touched on South Korean steel giant POSCO's long-delayed project to build a US$12 billion steel plant in the eastern Indian state of Odisha. Since 2005, the project has been stalled due to a series of regulatory and other delays.
In the run-up to Park's state visit to New Delhi, however, India's government has granted the project an environmental permit, allowing POSCO to secure 2,700 acres of land for the project. The state government has also made a commitment with regard to iron ore exploration rights, the office said.
On Thursday, Park and Singh "welcomed progress in the POSCO project in the state of Odisha including the acquisition of land, a prospecting license and revalidation of the environmental clearance, and agreed to continue to cooperate for the successful implementation of the project."
"The two leaders hoped that POSCO would commence work on the project at an early date. Prime Minister Singh welcomed the prospects of Korean companies participating in infrastructure building projects in India, such as electric power plants and railways construction," the statement said.
During a joint news conference, Singh said the project has moved to an "advanced stage."
The two leaders also agreed to take necessary measures to put a revision to the Double Taxation Avoidance Agreement at an early date, and take other steps to nurture a favorable environment for investors from both countries, according to the statement.
They also welcomed the possibility of setting up a Korean industrial park in the western Indian state of Rajasthan. Other economic points included revising the air service agreement to bolster flights between the two countries and expanding cooperation in nuclear power generation.
Park welcomed India's decision to provide tourist visa-on-arrival facilities to Koreans.
In the political and security sectors, Park and Singh agreed to try to hold a summit and a foreign ministers-led joint commission meeting on a regular basis. The sides also agreed to hold a regular dialogue between the national security structures of the two countries.
On the sidelines of the summit, the two sides signed the Agreement on the Protection of Classified Military Information. Park and Singh welcomed the pact, saying they believe it will contribute to enhancing mutual confidence and cooperation in the military field.
The two leaders also expressed concern over the development of North Korea's nuclear weapons program, saying it is in violation of its international obligations and commitments. They also urged Pyongyang to comply fully with its international obligations including under the relevant U.N. Security Council resolutions, according to the statement.
Park outlined her peace visions for the Korean Peninsula and Northeast Asia, known as the "Korean Peninsula trust process" and the "Northeast Asia peace and cooperation initiative," respectively, and Singh praised Park's efforts to promote peace in the region.
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