FICCI said the Comprehensive Economic Partnership Agreement (CEPA) with Korea could be used for achieving greater market access for Indian business in the North-East Asian country, as implementation of tariff reduction under the agreement would lead to opportunities for increased merchandise exports from India to Korea.

‘In 2008, India had a trade deficit of 2.4 billion dollars out of total bilateral trade of 15.6 billion dollars. With a strategic approach, CEPA could help towards attaining a more balanced trade between the two countries,’ FICCI Secretary General Amit Mitra said.

According to the findings of a FICCI analysis, India’s exports to Korea, though rising over the years, are still less than seven billion dollars, compared with 77 billion dollars exports from China.

India’s present share in Korea’s global imports is just 1.5 per cent in contrast to China’s share of about 18 per cent.

Under the CEPA, Korea would either eliminate import duties or reduce them in a phased manner on 93 per cent of its tariff lines.

The analysis identified 25 broad product groups as having potential for increased exports from India to Korea consequent to tariff elimination or reduction by the latter.

The potential items include marine products; salt, sulphur & mineral ores; chemicals, pharmaceuticals & dyes; leather goods & footwear; granite & stones; glassware; gems & jewellery; articles of iron & steel; copper, aluminium; tools & implements; machinery, appliances & parts; auto components; ships & boats; and instruments.

For instance, while in 2008 Korea imported marine products worth 2.5 billion dollars, India’s share was marginal (0.8 per cent).

On the other hand, base rate of Korea’s import duty by and large range between 10 and 20 per cent.

Clearly, marine products exports from India could benefit if such duties are lowered or abolished, it said.

Similarly, India accounts for a mere fraction of Korea’s total imports of copper exceeding six billion dollars. ‘It is expected that Indian industry would be able to capture a bigger share when the Korean import duty on copper (base rate three to eight per cent) is eliminated.’ ‘Another important area in which India stands to gain is services through greater market access in South Korea for our independent professionals and contractual service suppliers in areas like IT and IT-enabled services, English teaching, engineering, architectural and other services like financial services,’ Dr Mitra said.

Korea is a net importer of commercial services with its total imports exceeding 90 billion dollars in 2008.

India with its competitive advantages has enormous opportunities to emerge as a leading supplier of services in the Korean market, the Secretary General said.

UNI