India-Korea Economic Partnership Agreement: Exploring Trade Prospects for the Future
India and South Korea have a long-standing diplomatic and trade relationship that dates back to 1973. Over the years, both countries have been actively engaged in strengthening their economic ties. In this regard, the India-Korea Comprehensive Economic Partnership Agreement (IKCEPA) was signed in 2009 with the objective of boosting bilateral trade and investment between the two countries. The agreement has opened up new avenues for businesses on both sides by providing a favorable environment for investment.
The IKCEPA covers various areas of trade such as goods, services, investment, and intellectual property rights. Under the agreement, Korea has promised to remove tariffs on 93% of the goods imported from India including agricultural products, chemicals, and textiles. India, on the other hand, has agreed to remove tariffs on 75% of the goods imported from Korea. This has led to an increase in the volume of trade between the two countries. According to the Ministry of Commerce and Industry, bilateral trade between India and South Korea stood at USD 16.70 billion in 2019-20.
One of the key benefits of the IKCEPA is the promotion of investment between the two countries. Under the agreement, both countries have made commitments to provide a transparent and predictable business environment for investors. The agreement has also established a Joint Committee on Trade to review and resolve any issues that may arise between the two countries.
The IKCEPA has also provided opportunities for India to access the Korean market in sectors such as pharmaceuticals, IT, and automobile components. Korean companies have invested in several industries in India such as electronics, construction, and textiles. Similarly, Indian companies have invested in sectors such as energy, steel, and IT in Korea.
The agreement has also facilitated the movement of professionals between the two countries. This has increased the scope of exchange of ideas and knowledge sharing between the two countries. The IKCEPA has also provided a platform for cultural exchange, tourism, and education.
However, there are still challenges that need to be addressed to maximize the potential of the India-Korea economic partnership. One of the major issues is the non-tariff barriers that hinder trade between the two countries. Korea has strict regulations on the import of agricultural products from India. Similarly, India has restrictions on the import of certain manufactured goods from Korea. These issues need to be addressed to further enhance bilateral trade.
In conclusion, the India-Korea Comprehensive Economic Partnership Agreement has been a positive step towards enhancing trade and investment between the two countries. The agreement has provided a favorable environment for businesses on both sides and has opened up new avenues for trade. However, there are still challenges that need to be overcome to maximize the potential of this partnership. Efforts must be made by both countries to address these issues and further strengthen their economic ties.
