In many ways more than one, South Korean direct investment in India is symbolically connected to the liberalization of Indian economy that started in 1991.Within the year 1993, Korea emerged as the successful investor with its major behemoths like Hyundai, Daewoo, Samsung and LG corporations beginning to dot in the Indian corporate picture. Many foreign firms especially the ones from Japan and Europe were not at all interested in investment in India at that particular time. Some 13 years later , in India today, Hyundai is the second largest car seller and Samsung is the largest consumer electronics brand in a market which tantalizingly shows a double-digit growth in a world steeped at the fear of recession. Hyundai today also is the largest exporter of cars from India.
A relatively late entrant, Posco is the first foreign company allowed in the highly debated raw material sector of India. It’s risk taking attitude as well the knowledge thus far gained about India and it market is poised for a great dividend in the years to come.
Posco-India, a wholly owned subsidiary of South Korean steel major Posco, celebrated its first Foundation day on August 25’2006. On that day it introduced a code of conduct for its employees and pledged to adhere to its global ethical practices. With the successful completion of one year, the company reaffirmed its commitment to its propose d 12 million Greenfield steel project in Orissa. Posco had set-up its Indian arm on August 25, 2005 what then was known as the largest single direct foreign investment in India. Concurrently, Posco-India Ltd, a part of the world's fifth-largest steel maker, may win the rights to a 600-million-tonne iron ore mining lease from the Indian government by October’ 2006 which would also be a first of its kind in India for any foreign multinational company .The projec Conduct with focus on workplace conduct. The Code of Conduct reflects the company's uncompromising commitment to integrity and discipline with high standard of work ethics and transparency, a recent company release says so. Posco-India's Code of Conduct includes fundamental responsibilities of employees, stress on commitment to customers, business partners, competitors and investors; the company's commitment to employees. The rules of conduct detail out adoption of sound and fair work practices along with protection of confidential information. It also lays emphasis on avoiding conflicts of interest and creating a culture of mutual trust and respect. Further, the guiding principles laid down in the Code of Conduct details out the scope of benefits permissible in day to day dealings for employees. The Orissa government has sanctioned 1,135 acres of land for the plant. It has also appointed nodal officer, rehabilitation and resettlement officer and zonal officers to speed up the project work. In addition, the local Committee for Coastal Regulation Zone and Environmental Impact Assessment has decided to send recommendation to the Central Government for the construction of captive port. The recommendation for Posco-India's SEZ proposal has been sent fo r approval to Board of Approval of the Central government. Posco-India plans to kick off site preparation for steel plant and piling work for port by April 2007. The arrangements for water and power supply for the construction are expected to be in place by March 2007. The construction for steel plant is projected to begin in September, 2008 and the commissioning of first phase is expected by end of 2010 in line with the original schedule. In what can be called yet another silver lining to its foray to India, Posco may be drafted into Indian Railways Network, one of the largest in the world in terms of connectivity. In what would be the first investment by a foreign company in a railway project, Posco is all set to pick up 10% equity in a rail corridor connecting its steel plant with Orissa’s Paradeep Port. It is yet another sign

will also give it access to the local supply of iron ore over the next 30 years. Orissa, located on India's east coast, has almost 50 billion tonnes of iron ore resources.
Securing the 600 million tonnes of iron ore would help POSCO counter tight worldwide supplies of the raw material. Remembering the experience in last one year on the project front, Soung-Sik Cho, chairman cum managing director, Posco-India Private Limited, said, "Posco-India, the most prestigious of all its projects outside Korea is emerging stronger with every passing day" (sic) at a press conference. The progress of the project is steady and we are thankful to the people here, the state government and the government of India for supporting the project."

As a part of its corporate citizenship plan POSCO with some 20 odd employees of Korean origin started a local language (Oriya) class for its employees .It has also instructed its Korean employees to learn to dress like the locals and to know the customs of greetings and worship. In a plan to shed its heavy and apparent foreign identity, it has taken a policy to look not too different from any Indian counterpart. It has instructed all its employee s to respect the local sentiments and adopt a soft approach to their problems. It has lent its hand to the local community programmes like medical camp and sports etc. And by all signs, such overtures are paying off. Initial resistance is waning. The number of protests by the local people who are in the fear of losing their occupation and land is coming down and a testimony of bondage is emerging.

Recently, the CMD and one Indian staff on behalf of all employees of POSCO-India signed the pledge to abide by the Code of Conduct in all functions of the company. Subsequently all 86 employees underwent a self test on Code o that Posco’s Indian face is finally getting accepted in the mainstream.

The project would also be the first of its kind in the country, wherein it would be developed jointly with rail users — Public Sector Units (PSUs) and private companies. Indian Railways sources also confirmed that besides Posco, steel companies like Jindal, SAIL and MSPL Mining Company are also likely to join the consortium. “We have received a firm offer from Posco to invest 10% of the equity in Haridaspur (close to Posco's proposed plant)-Paradeep Port rail link, which is being developed by a special purpose vehicle (SPV) led by Rail Vikas Nigam Ltd (RVNL) of Indian Railways. The investment will allow the Korean company faster access to the port for shipping coal, iron ore and steel,” Orissa government sources said. Posco is also planning to set up its own port at Jatadhari near Paradeep, which would also be serviced through the new track. The Haridaspur-Paradeep rail line project is likely to cost Rs 560 crore (\ 115 billion) and will have an equity component of Rs 270 crore. Posco is likely to fork out Rs 27 crore (\ 5.6 billion) initially for the 10% stake. It would reduce the distance and time of transportation of raw materials like iron ore and coal from Orissa’s Keonjhar and Angul districts to the plant site. The RVNL board is understood to have cleared the project recently, paving way for the SPV formation and work on the project.

It is said that all global strategies are essentially local. Gone are the days when the mentions of multinationals used to generate awe and respect. Today, mutual respectability is what finally delivers. The persev erant firms that are pro- people and try at best to listen to the local murmurings are the final winner.

About the Author: Jayanta Bhattacharya, a Professor in Indian Institute of Technology, Kharagpur, India is now a Brain Pool sci entist at Korea Institute of Geosciences and Minerals, KIGAM in Daejeon. He is also the author of the book,” Corporate Social Responsibility: Ethical and Strategic Choice” . Email: jayantaism@yahoo.co.in