Korea-India work on tariffs
South Korea and India will work to expand the areas for tariff elimination by revising the bilateral Comprehensive Economic Partnership Agreement (CEPA).
The Korea-India CEPA, which took effect in January 2010, has been criticized for containing few items for tariff elimination and reduction and having excessively strict standards for country of origin.
The Korean Ministry of Trade, Industry, and Energy said that it held a CEPA ministerial joint commission meeting on June 18 in New Delhi and agreed to the pact’s revision.
Currently about 85 percent of Korean-made items exported to India (in terms both of number of items and value) are tariff free or pay less import duty.
As for Indian goods imported to Korea, 93 percent (90 per cent in terms of value) are subject to tariff elimination or reduction.
These figures are much lower than those for free trade agreements signed with other countries. For example, the tariff elimination/reduction ratio for Free Trade Agreements (FTAs) signed with the United States, the European Union, and Australia is 100 percent (in terms of number of items).
In the case of Japan, which signed a CEPA deal with India later than South Korea, its trade liberalization ratio is much higher than that of Korea’s.
A Korean trade ministry official said: “With the possible revision to the Korea-India CEPA, we expect to raise the trade liberalization ratio in the steel, electric and electronic, automotive parts, and petrochemical industries for which we have been at a disadvantage against Japanese exporters in the Indian market.”
The upgrade of the CEPA with India will likely increase Korea’s GDP by 0.05-0.1 percentage point, estimated the Korea Institute for International Economic Policy.
Last year, Korea exported US$12 billion goods to India and imported US$4.2 billion worth of goods from the South Asian nation, according to a report by The Korea Economic Daily.
Meanwhile, Minister of State for the Commerce and Industry Ministery Nirmala Sitharaman impressed upon the Korean side for greater market access in Agriculture, Marine, IT and other services.
Joo Hyung-hwan, Minister of Trade, Industry and Energy represented the Korean government at the meeting.
The “Korea Plus” office was opened in New Delhi to promote Korean investment in India.
The Delhi meeting aims to promote Korea’s further participation in India’s key initiatives such as “Make in India, Digital India, Skill India, Smart City projects, Power Generation, Smart Grid, Waste Management,” among others.
The ‘Korea-India Infra & Industry Forum 2016’ was held on the sidelines of the Ministerial Joint Committee with the participation of the business community of both countries and B2B MoUs were signed in areas such as auto parts, waste-to-energy etc. fii-news.com
