Future of trade relationship will be determined by what happens to Posco: Korean minister

India will conduct a fresh review of South Korean steel giant’s $12 billion investment plans in Orissa stalled for several years due to land and environmental clearance problems, Commerce and Industry Minister Anand Sharma has said.

Prime Minister Manmohan Singh is personally monitoring the progress of the project, Sharma assured his South Korean counterpart Sukwoo Hong in a meeting on Monday.

The Korean minister cautioned that the future of India-Korea trade relationship would also be determined by what happens to Posco whose investment plans in Orissa have been hanging fire since 2005,” a government official told Business Line.

Hong said the country was looking at Posco as a key determinant for its future plans in India. Posco’s investment proposal is the largest FDI proposal in India and the whole world, too, was keenly watching how the company was treated, the minister added.

The two ministers met at the Partnership Summit organised by CII to discuss bilateral trade ties. “We have been concerned about the delay and we will be conducting a review soon,” Sharma said.

The National Green Tribunal, in March 2012, directed the Ministry of Environment and Forest to make a fresh review to the environment clearance accorded by it to the project with specific reference to the observations raised by the review committees earlier.

The Odisha government, too, has said that it can acquire the required land for Posco to start its steel plant only after all environmental clearances are in place.

India will soon review the reasons for the delay in setting up the project by South Korean steel maker Posco in Orissa.

Trade minister Anand Sharma during his bilateral meeting with South Korean minister of knowledge economy Hong Suk-woo at the sidelines of the partnership summit jointly organized by commerce ministry and the Confederation of Indian Industry said that Prime Minister Manmohan Singh has been personally monitoring the project.

“We have been concerned about delays in Posco. We will be conducting a review,” said Sharma. “Even though there are other scopes for change, Posco will remain our key focus.”

“We are concerned about the delays and will be conducting a review. The Prime Minister himself is monitoring the issue,” Mr. Sharma told South Korea’s minister of knowledge economy Sukwoo Hong, according to a statement by the Press Information Bureau of India.

Apart from the Orissa project, a proposed joint-venture between state-run Steel Authority of India Ltd and Posco to build another steel plant is also in limbo due to differences between the companies on shareholding patterns.

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