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India-RoK Ties in the Wake of President Patil’s Visit

Rajaram Panda was Senior Fellow at the Institute for Defence Studies and Analyses, New Delhi. Click here for profile
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  • August 04, 2011

    India-Republic of Korea (RoK) bilateral relations scaled a new height when the two countries signed a nuclear energy technology agreement on July 25, 2011 during President Pratibha Patil’s recent visit to that country. This is the second major agreement between the two countries after the Comprehensive Economic Partnership Agreement (CEPA) signed in 2009 and implemented from January 1, 2010. These agreements show a remarkable uptrend in their economic relationship. With the signing of the nuclear deal RoK gains entry into India’s nuclear energy sector as the ninth partner. President Patil and her counterpart Lee Myung-Bak also discussed ways to “add substance and content to India-RoK relations”, in the backdrop of their “strategic partnership”. The “historic” agreement, as President Lee puts it, was signed on India’s behalf by Dr. Srikumar Banerjee, Secretary, Department of Atomic Energy (DAE), and on the RoK’s behalf by Kim Sung-hwan, Minister of Foreign Affairs and Trade of the RoK.

    The agreement with the RoK is like the other civil nuclear cooperation agreements that India has signed with other countries. The deal will facilitate Korean companies to enter the Indian market and tie up with the Nuclear Power Corporation (NPC) of India to build nuclear power stations. In fact, Seoul’s state-run Korea Electric Power Corp (KEPCO) has been seeking cooperation with the NPC to get into India’s nuclear power plant construction market. The deal will be of mutual advantage to both the countries and therefore it is a “win-win” agreement.1 Only three rounds of negotiations were needed to clinch the deal, the last being in December 2010. The India-RoK deal carried the least amount of historical nuclear baggage as far as India was concerned.

    India and the RoK had initiated talks on civil nuclear cooperation during a meeting between Prime Minister Manmohan Singh and President Lee on the sidelines of the ASEAN summit in Hanoi in October 2010. The RoK wants to export its nuclear technology and its goal is to export 80 nuclear reactors to various countries by 2030. Currently, the RoK has 21 reactors providing 40 per cent of the country’s power and plans are in place to increase it to 56 by 2020. India plans to build 40 or more nuclear reactors by 2032 and the RoK wants to export its light-water reactor technology.

    The RoK is upbeat about becoming a major player in international nuclear commerce. In 2009, Korean firms won a $18.6 billion contract to build four atomic power plants in the UAE after beating their US, Japanese and French rivals.2 The RoK has established itself as a supplier of cheaper nuclear hardware. From the Indian point of view, it provides an alternative supply chain for nuclear reactors and components like giant forgings.

    The significance of the India-RoK nuclear deal lies in the fact that it allows India to tap into ROK’s nuclear expertise and it takes the pressure off the India-Japan nuclear deal. India is aware of the domestic compulsions that the Japanese Prime Minister Kan is facing after the Fukushima nuclear accident. The Kan Naoto government has decided to do away with nuclear energy in a phased manner in order to assuage the public’s anti-nuclear sentiment. India is willing to allow the negotiations with Japan to proceed at a pace Japan is comfortable with. The importance of a deal with Japan lies in the fact that without it a number of western countries would find it difficult to enter the Indian nuclear sector because Japan holds the licences for critical components of nuclear reactors.

    Besides economic and nuclear co-operation, India-RoK relations are developing at other levels too. President Patil discussed the possibility of cooperation in the peaceful uses of outer space. India is looking forward to launching Korean satellites on Indian rockets, taking the discussions further from S.M. Krishna’s proposal during his visit to the RoK in June 2010. Indeed, the Indian “facilities are of high quality and are available at competitive prices”. Besides, defence ties are also looking up, especially given the deteriorating security situation in the East and South China Sea regions. In addition to naval and coast guard cooperation, there are prospects for co-production of defence equipment, transfer of technology and joint research and development. India is also planning to station a defence attaché in its embassy in Seoul.

    Further, India is seeking greater access in the Korean market for Indian pharmaceuticals and IT services. Another high point of President Patil’s visit was the signing of an MoU on media exchange and an agreement on administrative arrangements to provide social security to people working in India and Korea. These agreements were signed by Sanjay Singh, Secretary (East) and Choung Byoung-gug, Minister for Culture, Sports and Tourism, and Skand Ranjan Tayal, Ambassador of India to the RoK and Chin Soo Hea, Minister of Health and Welfare, respectively.

    The investment climate in India has also been attractive to Korean companies. The ideal approach would be for them to make India as the base for manufacturing operations, including for export to third countries. The two sides have agreed to work together to conclude a maritime shipment accord and a double-taxation prevention treaty at an early date that would be beneficial for both nations. A series of cultural events are being planned to mark 2011 as the year of cultural exchanges. In order to realise these objectives the frequency of direct flights between the two countries will have to be increased. This will also facilitate greater people-to-people exchange. Therefore, the existing Civil Aviation Agreement between the two needs to be amended granting each other’s carriers “fifth freedom rights”.3

    Though other issues such as economic, cultural, defence and civil aviation were on the agenda, the high point of President Patil's visit was the conclusion of the deal on civil nuclear cooperation. In view of India’s growing energy needs and plans for expanding nuclear power, the nuclear cooperation deal is likely to provide robustness to bilateral ties. If CEPA was the high point in 2010, the nuclear deal is the defining development in 2011.