India-S Korea trade agreement to eliminate tariffs on 7,044 goods including naphtha, polycarbonate

01-Jan-10

A trade agreement between Asia's third- and fourth-largest economies- India and South Korea will eliminate tariffs on 7,044 goods traded between the two countries with effect from Jan 1, 2010. Under the pact, India is to eliminate or phase out duties on 71.5% of South Korean products over the next 8 years and South Korea will follow for 88.6% of Indian imports over the same period. The comprehensive economic partnership agreement was inked in August after three years of negotiations and is similar to a free trade agreement. It encompasses trade in goods and services and investments along with chapters on competition and intellectual property rights - also includes phased eliminations of other tariffs, most notably in the car industry. With immediate effect, India will eliminate duties on 220 South Korean goods including mobile phones, computers, batteries and cow skins; while its counterpart will eliminate tariffs on 6,824 Indian products such as naphtha, oil cake, polycarbonate and hematite. Indian manufacturers of South Korean cars, such as Hyundai Motor India and GM Daewoo Auto and Technology, are to also pay less duty on their auto parts imported from South Korea under the agreement, which allows a phased removal of the 12% tariff over eight years.