New Delhi, Jan 25 (Inditop.com) After a firm foothold in India’s consumer durables market, with LG, Samsung and Hyundai becoming household names, South Korean companies are prospecting keenly in the country’s infrastructure space but dread red tape and procedural delays.
Members of a 52-member business delegation from the East Asian giant here with President Lee Myung-bak said they were also keen on tie-ups with Indian firms for infrastructure projects as their large conglomerates — called “chaebols” — were now looking outward.
“Indian economy is starting to take off. There is a huge potential for us and this would soon be comparable to that of the US,” said Suck Rai Cho, chairman of the Federation of Korean Industry, one of the largest industry lobbies in the country.
“Many South Korean companies are looking to invest in India — for example, in sectors like power, both nuclear and thermal, roads, telecom. India needs good infrastructure and we are there to invest,” Suck told Inditop.
Yet, representatives of South Korean companies whom Inditop spoke with said their interest to invest was not matched by fast clearances from policy-makers, as they have continued to face bureaucratic and other hurdles in getting projects started.
In fact, South Korean companies are already major investors in India with an estimated investment of $2.7 billion and presence of over 50 companies here. This apart, the east Asian giant is also a large trading partner and bilateral shipping of merchandise goods totals over $16 billion.
But the mood is far from upbeat when it comes to reality on the ground with the troubles faced by their steel giant Posco in everybody’s mind especially after it declared an investment of $12 billion for steel plants in Orissa but faced hurdles.
“If the government smoothens the regulatory problems, there are Korean companies waiting to invest here. Regulations should adhere to global standards,” said Suck, adding that was the reason companies like Hyundai, LG and Samsung saw tremendous success in India.
“India should now look at the next phase of investment from our country.”
Mi Rye Park, chairperson of Seoul-based Soosung Engineering, said she had come to India with a specific task of identifying potential partners for road projects, bridges and hi-speed railway systems. “India has lot of opportunities in the infrastructure space.”
Mi is also aware of the experiences some of her Korean counterparts have faced but hopes that the bilateral Comprehensive Economic Cooperation Agreement signed in 2009 that is now in force will help iron out a lot of issues.
“I do hope this agreement frees up a lot of outlets for our businesses.”
South Korean companies said one of the main reasons why President Lee began his four-day India visit in Chennai was to help him visit the Hyundai Motor factory there, signalling the importance his country attaches to bilateral economic engagement.
They said a leading think tank in their country, the Korean Institute for International Economic Policy, has forecast that the new comprehensive economic agreement between the two countries has the potential to push bilateral trade by $3.3 billion per annum.
According to Amit Mitra, secretary general, Federation of Indian Chambers of Commerce and Industry (FICCI), professional services, was a major area Indian companies must explore in South Korea, which is a net importer of such services worth $90 billion.
“India with its competitive advantages has enormous opportunities to emerge as a leading supplier of services in the Korean market,” Mitra said, specifically identifying areas like software, english teaching, engineering, architectural and financial services.
