President Park said ties between the two countries have progressed substantially and the two sides were committed to improving business environment.

Seoul: South Korea on Monday decided to provide $10 billion to India for infrastructure, development of smart cities, railways, power generation and other diversified areas as the two countries agreed to upgrade their bilateral relationship to a "Special Strategic Partnership".

Prime Minister Narendra Modi, who is in Seoul on a mission to woo investors, and South Korean President Park Geun-hye held discussions on a wide range of issues and resolved to add "new substance, speed and content" covering defence, trade and investment and regional cooperation to take the bilateral ties to a qualitatively higher level.

Addressing a joint press meet with President Park, Modi said, "Korea's rapid progress has made the vision of an Asian century stronger."

"We consider Korea a crucial partner in India's economic modernisation," said Modi, who arrived at Seoul from Mongolia on the last leg of his three-nation tour that also took him to China.

President Park said ties between the two countries have progressed substantially and the two sides were committed to improving business environment.

The two sides signed seven agreements and Memorandum of Understanding including one on Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income.

A joint statement issued at the end of the talks said India sees Korea as an "indispensable partner" in its "Act East" strategy and that both countries "recognise the value of the bilateral partnership and its contribution to bringing peace, stability and security in the Asia Pacific Region."

The Ministry of Strategy and Finance and the Export- Import Bank of Korea expressed their intention to provide $10 billion for cooperation in infrastructure, comprising Economic Development Cooperation Fund of $1 billion and export credits of $9 billion for priority sectors including smart cities, railways, power generation and transmission and other sectors to be agreed, the statement said.

The two governments and the EXIM banks of the two countries will hold consultations to chalk out a roadmap in order to materialise the envisioned financial support for priority sectors, it said.

Elaborating on the decision to upgrade the bilateral ties to special strategic partnership, the statement said the two sides have agreed to establish annual Summit meetings, in either country, or on the margins of plurilateral events and annually hold joint commission led by the two foreign ministers.

It was also agreed to expand cooperation between the two armed forces and further strengthen regular consultations between the National Security Council structures of the two countries on security, defence and cyber related issues.

"We intend to deepen our cooperation in defence technology and manufacture of defence equipment in India. This sector offers huge opportunities in India," Modi said.

The prime minister said he has requested President Park to support the participation of Korean companies in the defence sector in India. "Her response has been positive," he said.

Taking his pet 'Make in India' initiative to Korea, Modi said many Korean brands were household names in India. Both he and President Park saw vast opportunities for Korean companies to participate in this mission, Modi said, adding that he will be meeting Korean business leaders on Tuesday.

The prime minister is slated to have one-one-one meetings with heads of Hyundai Motors, Samsung Electronics, LG Industries and Doosan Group on Tuesday besides addressing the CEOs Forum.

Modi said the decision to establish a Joint Working Group on shipbuilding reflected the seriousness of the two sides to cooperate in this area. He said Korean companies will be participating in India's plans to acquire and manufacture LNG tankers.

The prime minister will visit the Hyundai Heavy Industries Shipyard at Ulsan on Tuesday.

Officials explained that India hopes to acquire nine LNG tankers and is keen Korea will come forward in building two of these and also help with the technology.