Korean FTAs in Effect
The Korea–India Comprehensive Economic Partnership Agreement (CEPA)
went into effect on January 01, 2010.
India is a large market, holding one-seventh of the world’s population and has the 10th highest nominal GDP in the world (as of 2010, IMF). Signing the CEPA* with India is expected to lay a groundwork for vitalizing trade, investment and human resource exchanges with an emerging giant economy. *Comprehensive Economic Partnership Agreement (CEPA) is a term used to emphasize the agreement encompasses various economic sectors across the board including goods and services trade, investment and economic cooperation. In practice, it has the same nature with FTA.
1. Significance of the Agreement
- Possible preoccupation of a huge emerging market (by signing FTA with India ahead of our major rivals (Japan, China, and the EU), it is possible to dominate the giant market in advance.)
- Expanding export (while India’s trade protectionism is being strengthened, the Agreement will help increase our export by improving our price competitiveness and mitigating the Indian government's anti-dumping measures.)
- Providing a variety of investment opportunities (except for the sensitive primary industry of India. Approximately 20 manufacturing sectors in the market including the sectors of food, beverage, textile and apparel will be opened for investment.)
- Enhancing consumer benefits (lower priced imports and more choices of goods and services)
- Building a bridgehead for the South Asian market (establishing economic cooperation with India will enrich the possibility to form such relations with the neighboring countries of India.)
2. Importance of the Indian Market
- India is one of the largest emerging markets, with a population of 1.1 billion (one-seventh of the world) and has the world’s fourth largest GDP in the purchasing power parity.
- India is still on the early stage of economic development but has the greatest growth potential as one of the emerging economies.
- As of 2010, its total trade amounts to USD 17.109 billion and its major foreign trade commodities are automotive parts and oil.