The trade and economic relations between India and Korea gathered strength over the last many years and bilateral trade increased by 155% during last five years up to 2010. India became 13th largest trade partner of Korea in 2010. The trade ties are conducted under the umbrella of the “Agreement of Trade Promotion and Economic and Technical Cooperation” signed in 1974.

A Joint Trade Committee (JTC) at the ministerial level exists between India and the ROK for review of bilateral trade. The 4th meeting of the JTC was held in Seoul in October 2003 under the co-chairmanship of the then Minister of Commerce & Industry of India Shri Arun Jaitely and the then Minister of Trade, Ministry of Foreign Affairs and Trade, ROK, Mr. Hwang Doo-yun. During the meeting the entire gamut of trade relations between the two countries was reviewed. The first three JTC meetings were held in September 1987 in New Delhi, November 1995 in Seoul and May, 2000 in New Delhi.

The first meeting of India-ROK Joint Committee at the ministerial level to review the implementation of India-Korea CEPA was held in New Delhi on January 20, 2011. The meeting was co-chaired by Shri Anand Sharma, Minister of Commerce and Industry, Government of India and Mr. Kim Jong- hoon, Minister for Trade, ROK. It was agreed to establish a Joint Committee at the JS/DG level to assist the Ministerial Joint Committee in effective operation and implementation of CEPA. It was also decided to merge the erstwhile Joint Trade Committee into the Joint Committee under the CEPA.

The first meeting of the Joint Business Council (JBC) of the Federation of Indian Chamber of Commerce & Industry (FICCI) & the Korean Chamber of Commerce and Industry (KCCI) was held in Seoul in 1977 under the agreement signed between KCCI and FICCI in February, 1976. The objective of the JBC is to exchange business missions and to share market information to promote economic, commercial and technological cooperation between the two countries. The last meeting of the JBC was held in New Delhi in December 2005.

Bilateral trade between India and Korea has shown remarkable progress and increased at an average annual rate of 31% during the last five years. Compared with 2001 when total trade turnover was US$2.52 billion (Indian exports to ROK were US$ 1.11 billion and Indian imports from ROK were US$ 1.41 billion), the total trade has increased by more than six and half times, and as per ROK’s figures, it stood at US$ 17.10 billion at the end of 2010. At a Summit meeting between President Lee Myung Bak and Prime Minister Manmohan Singh in New Delhi in January 2010 a target of US$ 30 billion in bilateral trade has been set for the year 2014.

In 2010, bilateral trade recorded an impressive growth of about 40%. Indian exports to ROK increased by 37% and its share in Korean imports increased from 0.82% in 2002 to 1.33% in 2010. India became 12th biggest source of imports for Korea in 2010. Major products in Indian export basket to Korea were petroleum oils (mainly naphtha, 53%), cotton yarn, ferro-alloys, unwrought aluminum, unwrought zinc, metal scrap , oil cakes, iron-ore, sesame seeds and marine products. Main items of Korean exports are- automobile parts and accessories, telecommunication equipments, ships, petroleum products, hot rolled products of iron. ROK exports to India in 2010 increased by 42% over 2009.

The total trade turnover between India and Republic of Korea in the last 10 years is as follows:

Year	Exports to India	Imports from India	Total Trade
2001	1.41	1.11	2.52
2002	1.44	1.25	2.69
2003	2.853	1.232	4.085
2004	3.632	1.850	5.482
2005	4.597	2.112	6.709
2006	5.532	3.640	9.172
2007	6.600	4.624	11.224
2008	8.977	6.581	15.558
2009	8.013	4.142	12.155
2010	11.435	5.674	17.109

According to the department of Industrial Policy and Promotion of India, ROK is the 17th largest investor in India in terms of actual inflow of FDI. During the period from April 2000 – June 2009 the total inflow of FDI from Republic of Korea was Rs. 20,626.27 million, equivalent to US$469.56 million. As per the data from the Export-Import Bank of Korea, the following is the total amount of FDI invested into India by Korea till 2010.

No. Of Acceptances	Acceptance Amount Since 1980 (in billion USD)	No. Of Investment	Investment Amount (in billion USD)
1,347	2.743	1945	1.93 (138.72 million in 2010)

Manufacturing accounted for 66% of the Korean investments in India, with transport attracting 21.1% and electronic appliances/ equipment 10.9%. ROKs investment in India has largely taken place in the manufacturing sector and transport industry. Other areas include- Fuels (power and oil refinery), Electrical (including computer software & electronics), Chemical (other than fertilizer), consumer electronics, and in food processing industries. Major ROK companies active in India include Hyundai Motor, Samsung Electronics, LG Electronics, Hyundai Mobis, Wia Corporate, Lotte Group, and Doosan Heavy Industries. Apart from major business groups, there are more than 150 Korean companies which have set up their businesses in India. Korea’s total investment in India constitutes 1.27% of its total investment worldwide. Korean investment in India is centered around Chennai, Pune, Noida and Gurgaon.

The Lotte Group acquired Parry’s Confectionery Limited and formed the Lotte India Corporation Limited in 2004. POSCO, one of the largest steel manufacturers in the world, is investing US$ 12 billion to construct an integrated steel plant at Paradeep in Jagatsinghpur District of Orissa with an estimated production capacity of 12 million tons of steel annually. This would be the single largest overseas investment by ROK and the single largest inward investment into India. The project obtained final environmental approval in early May, 2011 from the Ministry of Environment and Forests, Government of India, and is in the process of fulfilling other requirements under the Indian law before actual execution.

Indian investment in ROK up to 2010 is estimated to be about $1billion. Details of major ones are as follows:

• Novelis Inc., a subsidiary of Hindalco Industries Limited, the flagship company of Aditya Birla Group, acquired Alcan Taihan Aluminum Limited in January 2005. Novelis Inc. holds 68% of total capital investment of US$600 million of Novelis Korea Limited. Novelis Korea is Asia’s number one manufacturer of aluminum rolled products with state of art production facilities in Yeongju, and Ulsan and employs more than 1,200 employees.

• Tata Motors Limited, acquired Daewoo Commercial Vehicle (DWCV), Gunsan, Korea for a total price of KRW 120 billion (approximately US$ 102 million) in March 2004.

• Mahindra and Mahindra, having been declared the preferred bidder for Ssangyong Motors Company, signed an MOU in August 2010 to acquire majority stake in ailing Ssangyong Motors with a market capitalization of 365 million won ($310 million) and 743 billion ($635 million) in debt. The deal was approved by major creditors in Jan 2011 and the acquisition was completed in March, 2011. Mahindra and Mahindra acquired 70% stake in Ssangyong Motors with an investment of $458 million including corporate bonds worth $80 million approximately.

• Nakhoda Ltd., one of large Indian producers of yarn, has acquired Kyunghan Industry Company which has a capacity for 150 tons per day of partially oriented yarn (POY), 90 tons per day for fully drawn yarn and 60 tons of polyester chips. The investment is estimated of $40 million.

• United Phosphorus Ltd. is expected to put up an environmentally friendly crop protection facility with an investment of $14 million at Jangan Industrial Complex in Hwaseong, Gyeonggi Province.

• M/s Creative Plastic with an investment of [US$ 2 million] set up a 100% investment company, Alchemy Mold &Plastic Ltd. on Pyeongtaek.

H.E. Dr. Manmohan Singh, Prime Minister of India and H.E. Mr. Roh Moo-hyun, the then President of the Republic of Korea, met in New Delhi on 6 October 2004 and agreed to establish a joint study group (JSG) composed of officials, economists and representatives of the business community, to take a comprehensive view of the bilateral linkages in trade, investment and services and other areas of economic cooperation. In particular, the Joint Study Group was mandated with the task of, inter-alia, examining the feasibility of a comprehensive economic partnership agreement (CEPA) between the two countries. The JSG submitted its Report to the two governments in February 2006.

During the State Visit to ROK by President of India Dr. A.P.J. Abdul Kalam from 6-9 February, 2006, it was agreed to set-up a Joint Task Force (JTF) to develop a comprehensive Economic Partnership Agreement (CEPA). Seven Working Groups were set up for examining the issues arising in the CEPA, namely, Trade in goods, Trade in services, Investment, Regulations and Economic Cooperation, General provisions and Dispute settlement, Rules of Origin, Customs Administration & procedures.

Korea and India signed the Comprehensive Economic Partnership Agreement in Seoul on August 7, 2009, after more than three years and twelve rounds of negotiations, committing the two countries to lowering or eliminating import tariffs on a wide range of goods over the next 8 years and to facilitate expansion or opportunities for investments and exchange or services.

Korea is to phase out or reduce tariffs on 90 percent of Indian goods over a period of 8 years while India will phase out or cut tariffs on 85 percent of Korean goods. Most of South Korea’s major export items to India which are finished products such as automobiles parts, electronics including home appliances, with pre-CEPA tariffs of 5-15%, will enjoy further reduction of duties. Tariffs on auto parts will be lowered to 1-5%, tariffs on refrigerators and color TVs will be eliminated by 50% within 8 years. Similarly Indian exports which mostly comprise raw materials including steel will stand to gain. The agreement came into effect from January 1st 2010.

The Korea-India CEPA agreement is Korea’s first free trade agreement with a member country of the ‘BRICS. The agreement classifies 11,261 tariff lines of Korea and 5227 tariff lines of India broadly into 6 categories for the purpose of reduction / elimination of tariffs. The categories include those: which eliminate tariffs completely from the day of implementation of the agreement; having annual tariff reductions of 20% and 12.5%; others under which final tariffs will be reduced to 1-5% and 50% of base tariffs after 8 years; and an exclusion category which will enjoy no tariff reduction. Mostly agricultural products and some textiles etc figure in exclusion category. The India-Korea CEPA also allows temporary movement of professional workers such as computer programmers and engineers etc. Under CEPA 163 such professionals would be allowed access to Korean service market. Export Inspection Council of India and Korea Chamber of Commerce & Industry (KCCI) are mandated to issue Certificate of Origin (COO) for availing tariff concessions under CEPA.

During first year of CEPA in 2010, the bilateral trade between India and Republic of Korea increased by 40% to USD 17.10 billion as compared to 2009. Indian exports rose by 37% while Korean exports increased by 42% relative to 2009.

India and ROK are negotiating to revise the Double Taxation Avoidance Convention (DATC) between India and ROK signed in 1996. The fifth round of negotiations for the revision of the Convention was held in New Delhi from 6-8th September, 2010.

In January 2010, President Lee Myung-bak visited India as Chief Guest for the Republic Day of India giving boost to the trend of growth and expansion of bilateral trade between the two countries. The Comprehensive Economic Partnership Agreement (CEPA) between India and Korea also came into force from 1st January 2010.

Against this backdrop, the business and industry circles active in India-ROK relations set up the Indian Chamber of Commerce in Korea (ICCK) in January, 2010 with the support of Embassy of India to better serve the business community. From 2011, ICCK is holding a monthly meeting called “ICCK Speakers Forum” where they invite experts from diverse field to speak on the trade and commercial relationship between the two countries. The organization is trying to establish strong network with the Industrial Associations, Indian and Korean companies and governments. (ICCK webpage: www.indochamkorea.org).

The Embassy of India, Seoul, in association with the Indian Chamber of Commerce in Korea (ICCK), organized a Forum on India-Korea Information Technology Partnership for Global Success on 14 March 2011 in Seoul. Mr. Som Mittal, President, National Association of Software and Service Companies (NASSCOM), was the key note speaker. There were thematic presentations by TCS on BPO’s, Wipro on ICT, L&T Info Tech and Mahindra Satyam on Manufacturing, Design and Engineering, and a presentation from M/S Nielsen, a $5.1 billion company. The Forum provided an opportunity to showcase Indian IT Industry and refocus and energize India-Korea IT collaborations. As part of pre-publicity for the Forum, the Embassy brought out a publication on Indian IT success stories and a special supplement on Indian Software Industry including an interview with NASSCOM President in Korea IT Times, a popular monthly publication on IT. The Form received an enthusiastic response from the Korean industry and business.

The Commercial Section commissioned a market survey on “Korean Pharmaceutical & Generic Drugs Industry” in December 2010 and the study can be made available on request by the Embassy.

The Department of Industrial Policy & Promotion in the Ministry of Commerce and Industry, Government of India, has set up desk to facilitate Korean investors in India. The contact details of the ‘Korea Desk’ are as follows:

Investment Promotion & Infrastructure Development Cell
Department of Industrial Policy & Promotion
Ministry of Commerce & Industry
Government of India
368 Udyog Bhawan
New Delhi - 110 011
Telephone: + 91 11 2306 2221
Fax: + 91 11 2306 2626
E-mail:
Website: http://dipp.gov.in/korea

The Indian Overseas Bank (IOB) has a branch in Seoul since 1977. The following is the address of the branch of IOB in Seoul:

2431 Bldg., 9th Floor, 24-31, 1-ka, Chungmu-ro, Chung-ku,
Seoul 100-011, Republic of Korea
Tel: +82-2-753-0742, +82-2-753-0743
Fax: +82-2-756-0279
E-mail:
SWIFT CODE: IOBAKRSE

The Shinhan Bank has three branches in India, which are as follows:
42, Jolly Maker Chambers II, Nariman Point, Mumbai, 400-021,India.
Phone: +91 22-2282-2200
Fax: +91-22-2288-4277
E-mail:

Upper Ground Floor, Mercantile House, 15 Kasturba Gandhi Marg,
New Delhi, 110001,India.
Phone: +91 11-2370-6040
Fax: +91-11-2370-6044
E-mail:

No.8 Thirumalai Mudali Street, Walajpet
632 513, Vellore District, Tamilnadu, India
Phone No: 91-41-7227-8200
Fax No: 91-41-7223-2378
E-mail:

806, Narain manzil
23 ,.Barakhamba Road, New Delhi 110001,India.
Phone No.: 91-11-4351-5651,2
Fax No: 91-11-4351-5654
E-mail:
Website: http://in.wooribank.com

501/503/505, Statesman House,B-148, Barakhamba Road, New Delhi-110001,India.
Phone No: 91-11-4352-3111
Fax No: 91-11-4352-3176
E-mail:
Website: http://www.hanabank.com

Flat No.511 Ansal Bhawan, 16, Kasturba Gandhi Marg, New Delhi 110 001, India.
Tel No.: 91-11-4354-8960
Fax No.: 91-11-4354-8964

The Small Business Corporation of Korea has established the Korea Business Development Centre (KBDC) in New Delhi, to assist Korean small and medium enterprises in the expansion of their business and investments in India. Their contact details in India are as follows:

Korea Business Development Centre,
Mohan Co-operative Industrial Estate, New Delhi-110044
Tel: +91-11-4167 8601
E-mail:

i. Korea Importers Association: http://www.koima.or.kr

ii. The Korea Chamber of Commerce & Industry: http://english.korcham.net

iii. Korea International Trade Association: http://www.kita.org

iv. The Federation of Korean Industries: www.fki.or.kr

v. Korea Trade Investment Promotion Agency (KOTRA): http://english.kotra.or.kr

vi. BuyKorea (KOTRA): http://www.buykorea.org

vii. Korean Marketplace: http://www.gobizkorea.com

viii. EC21:http://www.ec21.com

ix. Ecplaza Korea: http://www.eckorea.net

x. Trade Korea: http://www.tradekorea.com

xi. Seoul Business Agency (SBA): http://www.sba.seoul.kr

xii. Small Business Corporation(SBC) : http://www.sbc.or.kr

xiii. Korea IT Business Association(KOIBA) : http://www.koiva.or.kr