Korean FDI in India: Perspectives on POSCO-India Project
This paper reviews the dynamics of POSCO-India project, a combined ¡°mine-steel plant-port¡± project in Orissa, India during the last five years. In contrast with the market oriented FDI undertaken by Korean companies like LG, Samsung, HMI in India, POSCO-India project is a natural resource seeking FDI that has faced hurdles from the very beginning in setting up its integrated steel plant. Especially there has been strong protest against this Korean project from the prospective displaced persons. The main reasons for the delay in the project are the failure to build local political consensus on the project, regulatory complexities, dispute on government record on the land, and compensation. We conclude that it is important to recognize the difference between the market oriented FDI and resource seeking FDI like Posco-India project. In this regard, the reasonable and fair compensation for the affected peoples is essential. Creating sustainable new employment in the relocation zone is necessary as well. Framing of socially responsible resettlement policy and fostering of local consensus on the cost and benefits of resource seeking FDI projects can be useful in expediting the implementation of such projects.
Volume (Year): 3 (2011)
Issue (Month): 2 (June)
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