India and South Korea Monday agreed to boost bilateral trade to $10 billion by 2008 by stepping up cooperation in various areas like defence, customs and easing visa rules.

At the conclusion of the fourth India-Republic of Korea Joint Commission (JCM) meeting here, South Korean Minister of Foreign Affairs and Trade Ban Ki-Moon and External Affairs Minister K. Natwar Singh signed an agreement on visa exemption for diplomatic and official passport holders.

"The two countries have also agreed to work towards further simplification of the existing visa procedures to facilitate travel to each other's territory for their peoples," an official statement said.

South Korea reaffirmed plans to upgrade its consulate agency in Mumbai to consulate general this year and hoped for an early completion of the necessary domestic procedures.

According to the minutes of the JCM, two more pacts on "defence industry and logistics cooperation and on customs cooperation, have been agreed upon and these agreements will be signed shortly".

The joint statement pointed to some visible signs of rapid growth in bilateral relations, including rise in trade volumes by 30 percent last year to cross $5 billion mark.

"With this growth rate, the target of $10 billion by 2008 that was set during the visit of South Korean President Roh to India is expected to be reached easily," the statement said.

The inflow of investment from South Korea has picked up, resulting in significant increase in the number of South Korean companies in India.

POSCO, one of the largest producers of steel in the world, has signed a memorandum of understanding with the Orissa government for setting up an integrated steel plant with a projected investment of about $12 billion.

Addressing an industry meeting, Ban said: "The final round of consultations of the India-Korea Joint Study Group are to be held soon to finalise its report on the formulation of a Comprehensive Economic Partnership Agreement (CEPA) between the two countries."

He advised Indian business to look at Korea as a base for venturing into the northeast Asian market in the same manner that Korean companies consider India to be central in their entry into the south Asian region.

On a four-day visit to India, Ban also met Petroleum Minister Mani Shankar Aiyar earlier in the day to discuss possible cooperation in the energy sector.

South Korea has agreed to consider India's proposal for a gas swap arrangement, including LNG and energy fuel produced from Russia's Sakhalin-1 block that will begin production later this year.

"South Korea has agreed to consider our proposal for strategic gas swaps," Aiyar told reporters after his talks with Ban.

India has suggested that South Korea consider a strategic gas swap, enabling both countries to off-take supplies at points closer to their countries.

This could include gas and LNG supplies contracted by both countries, explained Aiyar.

Taking note of the model of Daewoo-ONGC Videsh-GAIL (India) partnership in Myanmar, the two sides agreed that collaboration in the field of exploration of hydrocarbon resources between Indian and ROK (Republic of Korea) companies would lead to a win-win situation.

They agreed to intensify their collaboration for joint energy development in India as well as in third countries, including on setting up of joint commercial enterprises.

The two countries have also decided to consult closely with each other and cooperate as major consumers of oil production. South Korea has also agreed to assist the Indian side in setting up strategic oil reserves in India based on its experience in this area.

On the investment front, the two countries have agreed to step up efforts to promote foreign direct investment. In this connection, the two sides agreed to hold the second meeting of India-South Korea Joint Committee on Investment Promotion in India in the latter half of 2005.

Both sides reiterated their desire to promote bilateral cooperation in various areas, including infrastructure, information and communication technology, petrochemicals, textiles, oil and gas field development, automobiles, shipbuilding, steel, pharmaceuticals and agriculture.