New Delhi, May 8 (IANS): Saying that it was not only "looking East" but also "acting East", India on Friday urged South Korean companies to set up manufacturing and R&D bases in the country before it became too late a few years down the line.

"The future for Korean companies is not in Korea. It is in India both for manufacturing for the domestic market and for export," secretary, department of industrial policy and promotion, Amitabh Kant, told a business meeting here jointly organised by industry chamber Ficci, the Korea International Trade Association (KITA) and the Korean Chamber of Commerce India.

Turning to Hyundai Motor chief executive She Bo Shin, present at the meeting, Kant said: "If you don't set up your second plant now, you will regret it later," adding that three to four years from now the growing Indian economy would have attracted large and small companies from across the developed world and it would be too late to scout for manufacturing opportunities then.

"We can create 'plug and play' facilities for small and medium Korean companies," Kant said.

"We are not just looking East, we are acting East, the Indian economy is growing at 7 percent and in the long term, GDP is expected to grow between 9 percent and 10 percent," he added.

Jehak Jang, minister counsellor (economic) in the Korean embassy here, said Korea was going to set up an industrial park in Rajasthan and added that his country could be a valuable partner to India, powered by skill, scale and speed.

The union cabinet on Wednesday approved revision of the Double Taxation Avoidance Agreement (DTAA), which was signed in 1985 between India and South Korea to avoid double taxation and prevent fiscal evasion with respect to taxes on income.

The revised DTAA provides for source based taxation of capital gains, provisions for making adjustments to profits of associated enterprises on the basis of arm's length principle, provides for residence based taxation of shipping income, provisions for service of permanent establishment, rationalizes tax rates in the articles on dividend, interest and royalties and fees for technical services, an official statement issued here said.

The agreement further incorporates provisions for effective exchange of information and assistance in collection of taxes between tax authorities and also incorporates limitation of benefits provisions, to ensure that the benefits of the agreement are availed of by genuine residents of both countries.

The two-way trade between the countries currently stands at about $17 billion.

Over 400 Korean companies are doing business in India with more than $3 billion in investments.

Hyundai Motors has around 20 percent share in India's passenger car market, while LG and Samsung are market leaders with as much as 40 to 60 percent market share, respectively, in the consumer goods sector.