New Delhi: India is going to sign a comprehensive bilateral trade agreement with South Korea on 7 August. Minister of commerce and industry Anand Sharma is scheduled to visit Seoul in early August to sign the agreement.
The Cabinet had approved the signing of a Comprehensive Economic Partnership Agreement (CEPA) with South Korea on 2 July. South Korea will be the second country after Singapore with which India will be signing such a treaty.
The trade agreement is expected to come into effect starting 1 January 2010 after the South Korea Parliament ratifies the deal, a commerce and industry ministry official said under condition of anonymity.
Discussions for an India-Korea CEPA started in early 2006 and concluded this year. Out of the 5300 tariff lines, in 70% of the items tariffs will be completely eliminated within a period of 8 years. While India maintains a negative list of 15% of items, South Korea has included 8% of the items in the negative list. India’s negative list includes agricultural, textiles and auto sectors items. In 10% of items, tariff will be reduced up to 5% while in 10% items tariff will be halved from their current rate.
The treaty includes trade in goods and services as well as investments. It also contains chapters on competition and intellectual property rights. India is also the only country to obtain a commitment for temporary migration of professional workers under Mode 4 of WTO rules. South Korea has not offered such a commitment in any other bilateral agreement.
“Through this bilateral treaty, we expect more integration to a developed nation like South Korea. The agreement is also expected to encourage South Korean auto firms to invest more in India and see it as an export hub,” said another commerce and industry ministry official under condition of anonymity.