Kang Soon-ki, the Chief Representative of Korea EXIM Bank's New Delhi Office, is counseling with Indian company officials./ Photographed by Ha Man-joo

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By Ha Man-joo, New Delhi correspondent, AsiaToday - Korea's Official Development Assistance (ODA) projects are expected to accelerate as Indian Cabinet approved the modification of existing guidelines on ODA on November 18. So far, Korea's ODA for India was impossible due to the Indian government's internal regulations which limited to accept bilateral assistance from G-8 such as USA, Japan, Germany, and UK, as well European Commission and European Union countries.

Due to this, the $10 billion pledge by Korea for infrastructure development in India after discussions between Korean President Park Geun-hye and India's Prime Minister Narendra Modi back in May, did not make any progress. However, the Indian government approved to modify the existing guidelines on ODA, allowing Korean companies to expand their infrastructure projects in India.

In response to this, the Chief Representative of Korea EXIM Bank's New Delhi Office, Kang Soon-ki, said, "Due to India's ODA regulations that accepted ODA support only from G-8 countries, the economic cooperation between Korea-India was difficult to be materialized. However, India has now modified the guidelines on ODA, enabling bilateral business development."

Kang said, "This revision significantly reflects what our government has been demanding. This is because the Indian government is well aware of Korea's experience in infrastructure development and the Korean companies' executive ability."

He added, "We plan to support Korean companies' expansion in India by digging out infrastructure projects in India and allowing companies from both countries jointly carry out the projects. I look forward for more detailed negotiations and business opportunities from bilateral government channels."

According to the Indian government's modified ODA guidelines, India will now accept bilateral assistance from any other country, in addition to the existing bilateral partners, including USA, UK, Japan, Germany, France, Italy, Canada, Russian Federation as well as European Commission and European Union countries outside G-8, under the following conditions:

- The minimum assistance from bilateral partner shall be USD 1 billion in a year, of which at least 50% shall be normal untied loans.

- For all contracts (including goods, services and consultancy) the anticipation may be restricted to companies of the bilateral partner country and Indian companies. Indian companies may be restricted to those where ownership by Indian nationals/ companies is more than 50%.

- Not more than 30% of the total value of goods and services should be insisted to be sourced from the funding country.

- The annual rate of interest on special loans shall not exceed 0.3% and the tenor shall not be less than 40 years (with 10 years of moratorium on repayment).

- Individual projects with a minimum project cost of USD 250 million will only qualify for such special loans.

- Any project(s) implemented by State Government will be done with the concurrence of the concerned State Government.