Free Trade Agreement India And South Korea

The agreement for South Korea added to a large list of bilateral and multilateral free trade agreements established under Korean President Roh Moo-hyun. [3] With regard to India, the negotiations coincided with the Look East initiative of then-Indian Prime Minister Manmohan Singh, which promised greater regional integration between India and East Asian markets. Nandini Sarma is a junior fellow at the ORF Green Transitions initiative. Its research priorities are growth, trade and climate. She also writes on various current economic issues. She has a master`s degree from the Delhi School of Economics. Previously, it worked >> The average annual growth rate of South Korean exports between 2010 and 2018 was 39%, while that of Indian exports was 4%. After the initial increase in exports from India (Chart 6 and Table 3), the value of exports continued to decline, albeit slightly recovering in 2018. The value of exports increased to $7.9 billion in 2011, but subsequently declined to $4.2 billion in 2016. The trade deficit in favour of ROK reached $10.5 billion in 2018. Clothing and apparel, un knitted or crunched (product code SH 62), are among the top 12 Indian exports to Japan. While tariffs on this product have been reduced in the EPA, the absolute commercial value has fallen (see Figure 4).

In addition, the average annual growth rate was 2%. This may be due to competition from other countries, as Japan`s other trading partners, such as Bangladesh and Vietnam, also enjoy similar benefits; these countries outperform India in terms of the share of textile exports. To remain competitive in the textile sector, India must therefore innovate in terms of product lines and cost-cutting measures. The bilateral trade pact CEPA, which came into force in 2010, has stimulated trade and investment between the two countries, but Korea has been very clear One of the main problems India has faced with regard to its free trade agreements is the widening of the trade deficit that widened after the signing of the free trade agreement. (The exception to this pattern is trade relations with Sri Lanka.) The increase in the trade deficit poses a serious problem for India, as it involves a payment charge that must be paid in foreign exchange and reserves, which could otherwise lead to a balance-of-payments crisis.