Trade Agreement Between India And Korea
“Korean exports to India, in particular, fell dramatically from last year`s trade levels and fell by 60% in April, 72% in May, the worst decline since May 2009, with plant closures and delays in construction projects due to the effects of the COVID 19 epidemic. But the decline in exports slowed slightly in June, since the lifting of the national blockade,” said a statement from the South Korean Embassy on bilateral trade. The bilateral trade pact CEPA, which came into force in 2010, stimulated trade and investment between the two countries, but Korea was very clear after 12 rounds of negotiations between January 2005 and 25 September 2008, the Committee closed the debate and entered a phase of legal review by both governments.  The law was passed by the Indian Parliament on 2 July 2009 and by the South Korean Parliament on 6 November 2009.  The Comprehensive Economic Partnership Agreement (EPA) is a free trade agreement between India and South Korea.  The agreement was signed on August 7, 2009.  The signing ceremony took place in Seoul and the agreement was signed by Indian Trade Minister Anand Sharma and South Korean Trade Minister Kim Jong Hoon.  The negotiations lasted three and a half years and the first meeting took place in February 2006. The agreement was adopted by the South Korean Parliament on 6 November 2009.  It was passed next week by the Indian Parliament.  After its adoption, the agreement came into force sixty days later, on 1 January 2010.  This is a free trade agreement.  The agreement will allow the Indian service industry in South Korea to have better access.
Services include information technology, engineering, finance and the legal sector.  In South Korea, tariffs are reduced to less than 1%.  All this time, Korean companies have flooded India with cheaper imports of raw metals, steel and finished products. According to the Korea Trade Investment Promotion Agency (KOTRA), about 88% of all Korean subsidiaries established in India are % owned, while about 11.3% are joint ventures. Joint ventures exist mainly between Korean companies themselves and joint ventures with Indian companies are rare. This is mainly due to the indifferent experience of Korean SMEs in the mid-1990s, when they attempted to enter India via JVs with Indian companies. Korean companies, including Hyundai Motors, LG and Samsung, have decided to have 100% subsidiaries with large investments that have enabled them to operate on a large scale, establish their brand image at an early stage and gain bargaining power with the local government. The Korean investment model, which involves 100% subsidiaries, contrasts with the Japanese model, which followed the typical process of technical engagement, participation as a minority shareholder and the subsequent expansion of the holdings. India`s share of Korean world trade was 1.89 per cent in 2018 and India`s contribution to Korea`s world imports rose from 0.78 per cent in 2001 to 1.10 per cent in 2018. India is Korea`s 20th largest source of imports and from 2018 it7. the largest export market. Over the past forty years, the Korean export model has changed considerably.
Exports have moved from primary goods to light industrial products to heavy, high-tech and knowledge-related industrial products. One of the obstacles facing India is Korea`s restrictive policy on imports of primary agricultural products such as fruits and vegetables. These issues will be discussed at the EPA`s annual review meetings. There is also a need to diversify export products, which are currently mainly fuelled by petrochemicals, mainly naphtha, which accounts for more than half of India`s total exports to Korea.