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(LEAD) Park arrives in India on 'sales diplomacy' trip

2014/01/15 20:36

(ATTN: UPDATES with arrival; CHANGES dateline, headline; ADDS photo; TRIMS)

By Chang Jae-soon

NEW DELHI, Jan. 15 (Yonhap) -- President Park Geun-hye arrived in India on Wednesday on a trip aimed at opening the world's second-most populous nation wider to South Korean businesses and laying the foundation for winning construction projects in a nation with a massive demand for infrastructure.

South Korean President Park Geun-hye shakes hands with an Indian official after arriving in New Delhi on Jan. 15. (Yonhap)

The four-day state visit to New Delhi is part of a weeklong trip that will later take her to Switzerland for a state visit to the capital of Bern and then to the Swiss ski resort of Davos for an annual meeting of global business leaders and politicians.

Officials said the trip is part of Park's "sales diplomacy" drive aimed at using diplomatic trips and meetings to increase South Korea's economic and business interests. It is Park's first overseas trip in her second year in office and comes weeks after she announced a three-year plan to boost the economy.

The visit to India is focused mainly on increasing Korean business access to the massive market of 1.2 billion people. Despite the comprehensive economic partnership agreement, or CEPA, between the two countries, the level of bilateral free trade is not that high, officials said.

Upgrading the trade deal will be a major point of discussion, officials said. India also has high demand for infrastructure such as power plants, and laying the groundwork for Korean firms' participation in such projects is a key purpose of Park's visit, they said.

In an interview with India's Doordarshan TV broadcast Tuesday, Park said the CEPA should be revised to make it more effective if the two countries want to see their trade volume surge to more than US$100 billion by 2020 as forecast by some studies.

"In order for us to reach that trade volume by 2020, I believe the key is for us to upgrade the CEPA. The agreement has been concluded but the utilization rate is a mere 40 percent and the liberalization rate falls in comparison to free trade deals with other countries," Park said.

"Given the fact that India's tariff rate is lower than the rate stipulated in the CEPA, this disincentivizes companies from taking advantage of CEPA. So, by upgrading and raising the agreement, we hope to be able to further expand and find incentives between our two countries," she said.

Park also called for India's support for Korean firms trying to participate in nuclear power plant projects in India, saying South Korea can become a good partner for the country not only in terms of building and operating nuclear reactors, but also in the field of nuclear safety.

"In nuclear safety, I would note that ever since 1978 when Korea first began to operate a commercial nuclear reactor, we have not experienced any instance of a massive leak or large nuclear accident," she said.

Later Wednesday, Park was to hold a meeting with Korean residents. A summit with Prime Minister Manmohan Singh is set for Thursday, where the two leaders are expected to discuss ways to strengthen economic, diplomatic and defense cooperation.

On Friday, Park plans to attend a series of economic cooperation meetings.

"India is a country that has a global competitive edge in information technology, aerospace and other high-tech industries," said Ju Chul-ki, senior presidential foreign affairs secretary, adding that a series of memorandums of understanding will be signed to increase economic cooperation.