S. Korea eyes growing competition following Japan-India FTA
2011/02/18
S. Korea eyes growing competition following Japan-India FTA
SEOUL, Feb. 18 (Yonhap) — Competition between South Korean and Japanese businesses in India will likely intensify following New Delhi’s signing of a free trade agreement with Tokyo this week, a local trade body said Friday.
Japan and India signed a comprehensive economic partnership agreement (CEPA) Wednesday, which, once implemented, will remove 90 percent of import tariffs on both sides, according to a report by the Institute for International Trade, a think tank run by the Korea International Trade Association.
South Korea and India signed a CEPA in August 2009 and the agreement was enacted at the beginning of last year. The South Korea-India CEPA, however, eliminated only 85 percent of import duties.
"We are currently in an advantageous position in India with the Korea-India CEPA, enacted in January 2010, but the effect of the trade agreement may soon be diluted following the implementation of the Japan-India CEPA," the institute said in a report.
Japan is already South Korea’s largest competitor in India, the world’s second most populous nation and fourth-largest market, with the inter-substitution rate of their products in the Indian market coming to 34.37 in the first seven months of 2010, meaning more than one out of every three products sold in India has a Japanese competitor, or vice versa.
The substitution rate between South Korean and Chinese products in the cited period was 31.96.
"The Japan-India CEPA may come into effect before the end of the year at the earliest, which makes it more urgent for our country to carefully review its strategies and any change of conditions in the Indian market," it said.
