India and Korea today decided to stimulate investments to push infrastructure development and bilateral trade as they sought to ward off threats of rising protectionism.

Finance Minister Arun Jaitley co-chaired the fifth India-Korea Financial Dialogue in Seoul today with South Korea Deputy Prime Minister and Finance Minister Kim Dong-yeon and reviewed the international economic situation, and economic ties.

The two countries also signed agreements to establish USD 9 billion in concessional credit and USD 1 billion in ODA funding for infrastructure development projects in India.

"They agreed that in the face of uncertainty and the risk of rising protectionism, there was an urgent need for the two countries to increase efforts to stimulate investment flows, support for infrastructure development, and bilateral trade among others," a finance ministry statement said.

Jaitley is on a four-day official visit to Korea

As the world's fastest growing major economy, India offers Korea important opportunities to deploy its capital and technologies in India.

South Korea's interest in finding new openings to diversify its economic partnerships offers India great opportunities, the statement added.

The signing of the credit and official development assisstance agreement was to implement a decision taken during the visit of Prime Minister Narendra Modi to South Korea in May 2015.

"With this, Republic of Korea became one of the first non G-7 countries to become an Official Development Assistance (ODA) contributor in India," the statement added.

Both the ministers also agreed to consider deploying part of this fund towards the smart city projects in India.

"They also agreed to establish a mechanism at senior official levels, to identify good infrastructure projects in India, to draw upon these funds,' it said.

Earlier in the day, Jaitley met Korean Defence Minister, General Han Min-koo and discussed the rapidly growing bilateral defence partnership.

"With the earlier signing of an Inter-Governmental Agreement on Strategic Partnership in Defence Production, and the finalisation of a Make-in-India Project to manufacture 155mm Self-Propelled Artillery Guns in India, the two Ministers expressed satisfaction at the rapid growth of ties since the last meeting of Defence Ministers in April 2015," the statement added.