By Himanshu Yadav
India and Korea have shared a limited but cordial relationship in every sphere, be it cultural, political or trade. The presence of South Korean President Lee Myung Bak as the chief guest on India’s 61st Republic Day celebrations signifies the strengthening relationship between the two nations.
After establishing diplomatic ties in 1973, many trade agreements have been signed between the two countries, the most recent being Comprehensive Economic Partnership Agreement (CEPA) signed on August 7, 2009. Comprising six agreements aimed at opening up trade in goods, services and customs, the CEPA came into effect on January 1, 2010. It is similar to a free trade agreement (FTA), with a comprehensive coverage of trade in goods and services and investments, as well as intellectual property rights. Under the CEPA, India has eliminated duties on 75 per cent of products imported from South Korea on a custom value basis, while South Korea has removed duties on 93 per cent of products from India.
Events showcasing trade ties
As the agreement came into effect, within a month Korean companies held two major events in Delhi—Korea-India ICT Road Show–2010 on January 25, 2010 and Korea-India Communications Convergence Forum and Exhibition on February 19, 2010.
The road show was organised by Korea Trade Investment Promotion Agency (KOTRA). The event saw Korean companies from various segments showcasing their latest technologies to form business tieups with Indian companies. Sung Wook Cha, director, KOTRA, says, “The companies present at the show demonstrated some of their new products/technology including WiBro (Mobile WiMax) by Samsung Electronics, cutting edge mobiles and LED TV by LG Electronics, multicomputing and e-learning systems by Ncomputing, ultra fast data transfer technology and security software by Electronics & Telecommunications Research Institute.”
The second event was mainly focused on the future digital technology trends, where Korean companies introduced and promoted their communication technologies. According to Kim Do Yeon, director, Global Business Team, Korea Internet and Security Agency (KISA), the show aimed at building stronger relationship between India and Korea, especially in broadcasting and communication fields. “Many Indian companies were interested in our new technology and products. It is expected that Korean companies will now get more support from the Indian government to do trade with Indian companies,” he adds.
Benefit of the events
On the benefits of these shows, Vineet Agarwal, senior manager, KPMG, says, “Such shows apprise the Indian companies on the Korean expertise and capabilities in sectors like automobiles, consumer electronics, etc. This can open new trade avenues between the two nations and promote technology transfers between companies in both the countries. These shows also help in opening avenues for joint ventures and other subcontracting arrangements between Korean and Indian companies.”
KOTRA and Association of Korean Industries in India (AKII) have been actively involved in promoting business cooperation between Korea and India and facilitating investment in India.
The successful implementation of CEPA can help in forging strong ties between Indian and Korean companies. The success story of two giant electronics companies from Korea, LG and Samsung, reflects the potential of the Indian market. The bilateral trade between the two countries reached $15.6 billion (Rs 74,724 crore) in 2008, a rise of 6 per cent from 2002. Sung says, “CEPA agreement will definitely push trade between the two nations and many electronic items will be included in the list of traded items that attract zero duty on import. A lot of thrust will be given to electronics industry apart from other sectors like automobiles, information and communication and telecommunications.”