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Trade Relations Between India and South Korea

India and South Korea Trade Relations

India and South Korea share a strong economic partnership that has evolved significantly over the decades. Their trade relations are driven by complementary strengths, strategic partnerships, and shared interests in fostering economic growth. Below is a detailed overview of the trade relationship between the two countries:

Trade Relations Between India and South Korea

India and South Korea have developed a robust economic relationship over the years, focusing on trade, investment, and technological collaboration. The two countries have complementary economies that enable them to engage in mutually beneficial trade, combining India’s strengths in services, agriculture, and pharmaceuticals with South Korea’s expertise in electronics, automobiles, and industrial technology.

Overview of Trade Relations

  • Diplomatic Ties: India and South Korea established diplomatic relations in 1973, and economic cooperation has been a vital component of their partnership since then.

  • Bilateral Trade Agreement: The Comprehensive Economic Partnership Agreement (CEPA), signed in 2010, has been a cornerstone of trade relations, reducing tariffs and promoting investment.

  • Economic Framework: India and South Korea aim to enhance bilateral trade to $50 billion by 2030 under their Special Strategic Partnership.

Overview of Trade Relations

  • Economic Partnership Agreement (CEPA):

    • The Comprehensive Economic Partnership Agreement (CEPA), signed in 2010, is a cornerstone of the India-South Korea trade relationship. It reduces tariffs on goods and services, promoting bilateral trade.

    • CEPA has facilitated greater market access for Indian and Korean businesses, though both nations continue to seek further improvements in its terms.

  • Key Frameworks:

    • The two countries have strengthened their partnership under the “Special Strategic Partnership” established in 2015, emphasizing trade and investment.

    • Regular high-level dialogues and Joint Commission meetings enhance cooperation in trade, technology, and investment.

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Key Export-Import Categories
India’s Exports to South Korea:

  1. Minerals and Ores:

    • Iron ore and aluminum are significant export items.

  2. Chemicals:

    • Organic and inorganic chemicals.

  3. Textiles and Apparel:

    • Cotton, garments, and fabrics.

  4. Pharmaceuticals:

    • Generic medicines and active pharmaceutical ingredients (APIs).

  5. Food Products:

    • Seafood, tea, coffee, and spices.

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South Korea’s Exports to India:

  1. Electronics:

    • Mobile phones, semiconductors, and display panels.

  2. Automobiles:

    • Cars (e.g., Hyundai, Kia) and auto parts.

  3. Steel and Machinery:

    • Industrial machinery, steel products, and construction equipment.

  4. Petrochemicals:

    • Polymers and chemicals used in manufacturing.

  5. Technology Products:

    • High-tech equipment, such as medical devices and robotics.

Trade Volume

  • Current Trade (2023-24):

    • The bilateral trade between India and South Korea exceeded $27 billion.

    • South Korea is one of India’s largest trade partners in East Asia.

  • Trade Balance:

    • India faces a trade deficit with South Korea due to high imports of technology-intensive goods.