Addressing the India-Korea Business Partnership Forum 2018 here organised by Indian industry chamber CII and the Korea International Trade Association (KITA), Commerce Ministry Additional Secretary Sanjay Chaddha said that a committee will be constituted shortly under the recently formed India-Korea Future Strategy Group to specifically operationalise joint cooperation in research and development (R&D) projects.
He said the India-Korea CEPA signed in 2010 was India's first FTA entered into outside the developed economies of the Organisation for Economic Co-operation and Development (OECD).
"Both countries are also involved in negotiations for the RCEP (Regional Comprehensive Economic Partnership) which involves a lot of sensitivities," he said.
"At a time of growing trade imbalance between our two countries and global slump, when Indian industry is wary of opening new lines, it has also been decided to review the CEPA."
Chaddha noted that while the bilateral trade has doubled in the nine years since the CEPA was signed, the trade deficit has widened in Korea's favour. South Korea's exports to India jumped from $10.47 billion in 2010-11 to $16.36 billion in 2017-18.
India's exports to South Korea, however, grew more slowly from $3.72 billion in 2010-11 to $4.46 billion in 2017-18.
Elaborating on the challenges to the CEPA, the official said that the utilisation rate of duty concessions on the merchandise trade is the lowest for both countries.
"We have to understand that it is only when the utilisation rate increases will the industry be comfortable about further liberalisation of markets," he said.
In his address, Korean Ambassador to India Shin BongKil noted that economic relations has not kept pace with the high-level friendship and trust established between the political leadership of the two countries.
"India and Korea have a bilateral trade target of $50 billion which is still very small compared to Korea's trade with China which was $200 billion last year," he said.
BongKil pointed out that despite the CEPA, South Korean investment into India has stayed low at around $0.5 billion annually and cumulatively amounted to only $4.6 billion for the period 1980-2017.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
