India and World – South Korea
Given the size of the Korean and Indian economies and their structural complementarities, the current flow of trade and investment between two countries is relatively low due to several tariff and non-tariff barriers
South Korea is the 4th largest economy in Asia, and remains a key trading and investment partner to India.
$30 billion bilateral trade turnover target to be achieved by 2014.
Bilateral Trdae surged 45% to reach $17b in 2010
Bilateral Investments reached $4b
The agreement which proposes bilateral economic cooperation in 13 areas, such as audio-visual content, energy, information and communications technology, and science and technology, will strengthen economic cooperation and both countries will benefit immensely.
Though, the agreement did not pay much attention to reducing tariffs and other regulations in agriculture, fisheries, and mining due to their sensitive nature, the India-Korea CEPA will boost trade and Korean investment and professionals from India
Benefits to India:
It benefits Indian service sector and service workers to work for South Korean companies. The CEPA agreement which gives market access and allows inflows of professionals such as IT workers, engineers, and teachers would be beneficial for India and improve bilateral trade in services.
Major sectors attracting Korean FDI approvals are electrical equipments (including computer software & electronics), metallurgical industries, food processing industries etc. some of the sectors where South Korean investors will be able to invest and reap benefits are food processing, textiles, garments, chemicals, metals and machinery due to a reduction in tariffs.
This is a good opportunity for the Indian IT industry looking to establish a stronger presence in the APEC region
Indian exporters would benefit from the CEPA in sectors, like textiles and apparel products and agricultural and fishery products, where Korea maintains high tariffs of more than 30 per cent.
Further, Indian exports which were subject to rigid standards, technical regulations and conformity assessment procedures, particularly in drugs, food, cosmetics etc. will find it easier to enter Korean markets.
Benefits to SK:
The agreement is forecast to benefit South Korean shipment of auto parts
The opening up of the Indian economy has not only enhanced market access to Korean goods, but also provided investment opportunities for the internationally competitive Korean companies.
As a result of the CEPA, some of the barriers to Korean investors such as high regulation, nationality or residency requirements, biasness in award of projects, compulsory registration with local specific service provider associations, etc will be relaxed, thereby increasing Korean FDI in the future.
South Korea has become the ninth country which had signed nuclear agreement with India after it got the waiver from the Nuclear Suppliers’ Group (NSG) in 2008.The others are the US, France, Russia, Canada, Mongolia, Kazakhstan, Argentina and Namibia, an official said
Koreans have established themselves as not only much cheaper nuclear suppliers, but more crucially, from the Indian point of view, as an alternative supply chain for nuclear reactors and its components like giant forgings.
The India-South Korea deal therefore does two things — it allows India to tap into another country’s nuclear expertise and it takes the pressure off the India-Japan nuclear deal.
6 Steps: Political Partnership thru high level visits
Deepening eco relations
Forging Science and Technology links
Energy cooperation thru research in energy efficiency,renewable
People to people communications
Social security agreement
Civil Aviation Agreement so as to grant each other’s carriers fifth freedom rights. They agreed to do this soon