Commerce Ministry to study impact of FTA with South Korea

NEW DELHI: The Commerce Ministry has commissioned a study to assess the impact of free trade agreement with South Korea, with which India had a trade deficit of about $9 billion in 2012-13.

The issue of widening trade deficit was raised by Commerce and Industry Minister Anand Sharma with South Korean counterpart Yoon Sang-Jick during a meeting here today.

"Although bilateral trade is increasing between the two countries, trade deficit is a case of concern for India. Both the sides should identify sectors which can address this problem," Sharma conveyed to Sang-Jick during the meeting.

India and South Korea implemented the Comprehensive Economic Partnership Agreement (CEPA) in January 2010. The bilateral trade is in favour of South Korea. Trade deficit increased from $5.1 billion in 2009-10 to $8.89 billion in 2012-13.

"The Department of Commerce has commissioned a study to assess the impact of the CEPA," an official said.

Sharma also sought investments from South Korea in chip manufacturing and computer hardware.

Investments in these areas will help India in reducing import bill of electronic items. India has imported electronic products worth about $33 billion in the last fiscal. India consumes semiconductor products worth about $7 billion every year.

Hyundai Motor, Samsung Electronics, LG and Hyundai Mobis are among the Korean companies that are present in India.

Both the sides also agreed to set up a joint CEO forum besides a ministerial committee to oversee the economic engagements.

The bilateral trade between the countries stood at $17.3 billion in 2012-13.