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Korean Companies To Benefit by Trade Deal with India
Import duties on 85 percent of Korean goods, including auto parts and electronics, will be cut or phased out over the next decade, Korea's Trade Ministry said today. Indian Commerce Minister Anand Sharma and his Korean counterpart Kim Jong Hoon will sign the agreement in Seoul, said Choi Kyong Lim, the official overseeing trade agreements, said today in Seoul.
Hyundai Motor Co., LG Electronics Inc. and other South Korean companies will get greater access to India's 1.2 billion people in a trade deal to be signed tomorrow. India's $1.2 trillion economy grew 5.8 percent in the three months to March 31, brushing off the global slowdown that has dragged Korea into recession. Singapore's exports to India excluding oil products more than doubled in the two years after they signed a similar accord in 2005, turning the city state's deficit to a surplus, according to Indian Commerce Ministry data. "South Korea is looking to expand its presence in India with its vibrant economy and 1.2 billion population," said Myong Jin Ho, a researcher at the Institute for International Trade in Seoul. Bilateral trade between India and South Korea rose 39 percent last year to $15.6 billion. South Korea exported $3.6 billion of goods to India, and imported $1.6 billion in the first six months of this year. India's growth puts more money into the hands of consumers in a country where almost 30 percent of the population is under 15 years of age. Younger people tend to spend more on vehicles, phones and other consumer goods. Car Demand India will eliminate or reduce tariffs on 85 percent of South Korean exports over 10 years, Korea's Trade Ministry said. These will include auto parts, tankers, electronic goods, machinery parts and synthetic rubber. South Korea's cuts will cover about 90 percent of Indian exports, including polycarbonates, leather, industrial diamonds, gasoline and corn for livestock. Hyundai, which operates an auto plant near Chennai in southeastern India, sold 244,030 vehicles in the country in the year ended March 31. The largest South Korean automaker gets 55 percent of sales from emerging markets including India and China, where car demand has withstood the global slowdown. LG Electronics, the world's third-largest maker of liquid- crystal-display televisions, also has plants in India to make consumer appliances and personal computer monitors. The two nations decided to exclude other agricultural goods, finished automobiles, fisheries and textiles from the deal. The Korean law implementing the pact is expected to take effect on Jan. 1, Choi said. Once the cuts begin, Korea's exports to India will likely increase by an annual average of $177 million and India's exports to Korea $37 million over the next 10 years, according to Korea Institute for Industrial Economics & Trade. Conservative "Those forecasts may be conservative, given India's potential," said Myong. The two nations will also expand job opportunities for skilled personnel from India in the field of information technology, engineering, management consulting, machinery and telecommunications, and scientific research, the ministry said. It didn't specify any quotas on the number of Indian nationals expected to take up jobs in Korea in the future. India has also opened up its market to investment in all its industries with the exception of agriculture, fisheries and mining. South Korea will be able to invest in food processing, textiles, garments, chemicals, metals and machinery, it said. The following is a table of the top 10 traded goods for South Korea and India, according to the Korean Trade Ministry.read source article