WORLD> Asia-Pacific
ROK, India sign free trade deal
(Agencies)
Updated: 2009-08-07 11:50

SEOUL: India and the Republic of Korea (ROK) signed a free trade deal on Friday that a minister said had the potential to nearly double the more than $15 billion in annual trade between Asia's third and fourth largest economies in the next decade.

It is the first such deal by India with a developed economy and the ROK's eighth free trade pact after it struck agreements to open up markets with the United States in 2007 and the European Union last month, both of which have yet to be implemented.

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The deal requires ratification by ROK parliament but can take effect without further steps by India, the ROK's trade ministry said. "It has the potential even to double (trade) over...the next 10 years. That's what we'll be aiming at," Indian Trade Minister Anand Sharma told a joint news conference with the ROK's Trade Minister Kim Jong-hoon.

The deal will eliminate tariffs on three quarters of India's imports from the ROK by value, and more than 80 percent of ROK's imports from India.

A study by the state-run Korea Institute for International Economic Policy said the pact could boost annual two-way trade by $3.3 billion in the near term and raise the ROK's GDP by 1.3 trillion won ($1.06 billion).

The ROK's main exports to India are automotive parts, petroleum products, and mobile phones. Its largest import from India is naphtha, accounting for more than half of imports in 2008.