South Korea and India have boosted their bilateral ties by mutually agreeing upon a Free Trade Agreement (FTA). The deal is expected to bring $20 billion in two-way trade as India aims to be a key partner of Korea’s new investment project which is worth close to $90 billion. The South Korean trade ministry felt that this would provide necessary fillip to improve the economic prospects of both countries. Though the deal has to be ratified by the legislative body of respective nations, in the current scenario, there will not be any hurdle.
South Korea regards the FTA with India as a break through, as they were able to strike the deal ahead of Japan, the EU and China with whom India is engaged in talks for a similar pact. The unlikely approval for the FTA with the US has also forced them to see the deal as a big opportunity for the economy right now. Already the country has FTAs with Chile and Singapore; and one with India, where they have a good presence in the automotive and telecommunications industry, will further boost their market in that country.
The commerce between the two nations includes automotive parts, petroleum products, synthetic resins and mobile phones from South Korea and naphtha from India. Both the countries are aiming to enter other areas of commerce through this FTA, which is expected to be in place by this year end. Hyundai Motor Co., L.G Mobile and Samsung enjoy a good market share in their respective industries in India.
South Korea is engaged in talks with several other countries to sign similar pacts to meet the target of $300 billion in exports by 2013. The new public-private partnership project, close to $90 billion indicates the country is taking every step to ward off global recession blues. South Korea is lagging as the 13th largest economy, and the government intends to become one among the top 10 in the world.