South Korea and India today signed a broad trade agreement to slash or eliminate tariffs on goods and services in a bid to increase commerce between two of Asia's four biggest economies.
The agreement covering import duties on 90 per cent of Indian goods and 85 per cent of South Korean products in terms of value was signed by Indian commerce minister Anand Sharma and his Korean counterpart Kim Jong Hoon at a ceremony in Seoul.
The pact to phase out the duties on products including auto parts and electronics over the next decade may begin taking effect in January, South Korea's trade ministry had disclosed yesterday. The two sides formally called a Comprehensive Economic Partnership Agreement, but South Korea is calling it a free trade deal.
The agreement between Asia's third and fourth-largest gives companies such as Hyundai Motor Co and LG Electronics Inc better access to the growing Indian market. It still needs ratification by the South Korean legislature. India's legislature doesn't need to separately ratify the deal, South Korea said.
Other South Korean goods covered include marine tankers, machinery parts and synthetic rubber. The deal also covers Indian exports including polycarbonates, leather, industrial diamonds, gasoline and corn for livestock.
The trade ministers hailed the achievement. Kim said it was South Korea's first free trade accord with one of the fast-growing BRIC countries - Brazil, Russia, India and China. Sharma said it was India's first comprehensive trade agreement with a major economy.