New Delhi: India is closer to signing a free trade agreement (FTA) with South Korea, giving the country an opportunity to aggressively engage within Asia when the US and European economies are in turmoil.
“The deal is done and the agreement will be signed by December,” a senior commerce ministry official said on the sidelines of a Ficci function on Tuesday.
While India does not need a Parliamentary approval for a trade pact, South Korea would need a green signal from its national assembly.
“It will go to our Cabinet while the Koreans would need a nod from their national assembly,” the official said, adding the process of verification of the documents would be completed by 18 November.
The India-South Korea FTA would break duty barriers for over 11.2-billion-dollar bilateral trade. Over 90% of the items under trade would be covered in the agreement, which is likely to come into effect in 2009.
India’s engagement within Asia is set to grow with the help of the trade-opening agreements reaching final stages with Asean. Besides an umbrella pact with the 10-nation bloc, there would be individual deals with several member countries like Indonesia and Malaysia.
While negotiations with Japan have also reached advanced stage, India is hard-selling its $70-billion pharmaceutical industry in the agreement.
“By 2010, we will be seriously engaged with east and north-east Asia,” the official said.
India, growing by over 8% for the last four years, is also negotiating FTAs with European Union while preliminary studies have been initiated for sharing market with Australia and New Zealand.
The country has so far signed five FTAs and five preferential trade agreements. Export to these countries account for 10% of the its total outbound shipments. Twelve more are under negotiation.