The first meeting of the India-South Korea Joint Ministerial Committee co-chaired by the Indian Commerce and Industry Minister, Anand Sharma and the South Korean Minister for Trade, Kim Jong-Hoon in New Delhi on Thursday reviewed the one-year old Comprehensive Economic Partnership Agreement (CEPA) between the two countries and also discussed the progress in the negotiations for the Doha Round of the WTO.

The India-South Korea CEPA came into force from January 1, 2010 after siging in August 2009. After the operation of CEPA, the bilateral trade between the two countries grew by nearly 44% over the previous year and stood at nearly $15 billion. Despite the global economic slowdown the trade between our two countries grew five fold in the last 8 years.

South Korea has FTAs with Chile, Singapore, ASEAN and EFTA countries. It has concluded FTA negotiations with the US and the EU.

The next meeting of the India-South Korea Joint Ministerial Committee will be in Seoul in 2012.

Both sides expressed hope that bilateral investment would also increase further as a result of the CEPA. A joint committee at the joint secretary level for India and director general level for South Korea as envisaged under the CEPA was formally established to assist the joint ministerial committee in ensuring the effective operation and implementation of the CEPA.

Both sides took note of the difficulties faced by the business communities of either sides relating to visa procedures and hoped that the current negotiation on simplification of visa procedures would soon be concluded. The ministers also expressed hope that, after completion of necessary formalities, the Social Security Agreement, which was signed in October 2010, would come into force in the near future that would help both Indian and South Korean professionals working in each other’s country.

The two sides identified measures to be taken for enhancing Korea’s investment in India. The ministers also welcomed the fact that the two countries agreed, in principle, to conclude an agreement on co-production of broadcasting programmes and to expedite the necessary procedures in signing and bringing it into force as early as possible. They expressed hope that the agreement would enhance bilateral cooperation in the audio-visual sector.

The ministers shared the view that a strong multilateral trading system is vital for ensuring future growth in the world economy and committed themselves to continue their cooperation to achieve an ambitious, balanced and comprehensive conclusion of the Doha Development Round as early as possible.

The Indian Commerce and Industry Minister, Anand Sharma speaking at the India-Korea Business Forum alongwith with his South Korean counterpart, Kim Jong-Hoon said that the signing of CEPA with Republic of Korea in August 2009 underscored our strong commitment to deepening trade and investment linkages between our two countries.

“I am confident that as exporters on both sides develop a better understanding of the advantages presented by this agreement through a liberal tariff regime, we should easily be in a position to achieve the trade target of $30 billion by 2014. The services economy will, particularly benefit from a liberalized regime on both sides and will form an important building block for augmenting the bilateral trade between our two countries. We view the agreement with the Republic of Korea to serve as an economic bridge between South Asia and the larger East Asian economy, paving the way for a larger regional economic integration across the continent of Asia,” he said.

The Forum was attended by senior officials and representatives from trade and apex business chambers from both the countries.

Sharma said “in the next decade, India is set to absorb investment of over $1.7 trillion in infrastructure alone. He informed that the Korean Steel Major POSCO Project in Orissa will not only produce 12 million tonnes of steel, bringing in an investment of over $12 billion, but would also create nearly 50,000 direct and indirect jobs. It will also have considerable spin off for largescale mineral development, infrastructure development through captive port, road hubs, downstream activities in automobile and construction.”

Sharma mentioned that over the last three years, India had received FDI in excess of $100 billion and in the next five years India would be receiving FDI equity inflows in excess of $250 billion.

“I would like to particularly mention that Delhi-Mumbai Industrial Corridor (DMIC) project represents a whole range of opportunity for establishing new urban townships, investment regions, logistic hubs in an economically vibrant part of India. We welcome South Korean business community to join hands with us in our endeavour to develop this Corridor,” he said.

Sharma also said that India was in the process of establishing large investment regions - National Manufacturing Investment Zones to attract investments in the entire gamut of manufacturing industry. “We invite South Korean investments in these regions for the development and also for establishment of manufacturing bases”, he added.

In the automobile sector, India is fast emerging as a global design hub for small auto manufacture. South Korean auto major like Hyundai have gained considerable popularity in the Indian market. Working together, Indian and South Korean companies can develop a model which reaches out to the larger markets in East Asian region. Hyundai Automobiles through its plant in Chennai has expanded operations in the last decade and today is producing 600,000 units a year.

Sharma noted that Asia decisively will have a pivotal role to play in the emerging order and there is no doubt that partnership between India and South Korea will be one of the defining themes of this trend. India’s relationship with South Korea forms the cornerstone of India’s ‘Look East Policy’ which has defined our engagement with the larger East Asian region.