IANS
Seoul, Aug 8: India and South Korea have signed an agreement here to boost bilateral trade, WAM news agency reported.
The representatives from both the countries Friday signed the Comprehensive Economic Partnership Agreement (CEPA) that will facilitate duty cuts on auto parts and electronic items, among others.
The scheme, similar to the free trade agreements (FTA), will lower import tariffs on cars and other manufactured items.
"The CEPA sends signals to the world that the two countries are committed to free trade and are against protectionism,' South Korean Trade Minister Kim Jong-hoon said after signing the pact.
The accord will come into effect early next year after the South Korean parliament ratifies it.
The pact is expected to boost bilateral trade by as much as $3.3 billion annually, the state-run Korea Institute for International Economic Policy (KIEP) said.
Tariffs on South Korean auto parts, the country's biggest trade item, are to be reduced to as low as one percent over an eight-year period from the current average of 12.5 percent.
India and South Africa, however, agreed to exclude fisheries and some agricultural products, such as dairy, beef and pork, from the tariff concessions.
The agreement's slower tariff-removal rate underlines the importance Korea places on securing a foothold in the Indian market ahead of China and Japan, according to South Korea's trade ministry.
The deal with India addresses all aspects of goods and services trade, as well as investments.
In the service sector, India agreed to open its telecom, accounting, medical and advertising markets to South Korean companies with the exception of agriculture, fisheries and mining.
South Korean lenders will also be allowed to open branches in India.
South Korea will be able to invest in food processing, textiles, garments, chemicals, metals and machinery, according to the ministry.
Both sides also agreed to allow temporary migration of professionals such as computer programmers and engineers. South Korea had not offered such a commitment to any of its FTA partners before.