India Free Trade Agreement With South Korea

Clothing and apparel, un knitted or crunched (product code SH 62), are among the top 12 Indian exports to Japan. While tariffs on this product have been reduced in the EPA, the absolute commercial value has fallen (see Figure 4). In addition, the average annual growth rate was 2%. This may be due to competition from other countries, as Japan`s other trading partners, such as Bangladesh and Vietnam, also enjoy similar benefits; these countries outperform India in terms of the share of textile exports. To remain competitive in the textile sector, India must therefore innovate in terms of product lines and cost-cutting measures. Korea`s exports to India amounted to $5.36 billion between January and June 2020, up 33% from the same period last year, when the coronavirus pandemic weighed heavily on bilateral trade. However, Korean imports from India fell by less than 5.3% to $2.59 billion, reducing the trade surplus to $2.76 billion, almost half from the previous year. Certainly, india-Australia trade relations have developed in the absence of free trade agreements and reached $16.6 billion in 2018. This year, according to unsawed Comtrade, India`s exports to Australia totaled $4.2 billion and Indian imports from Australia totaled $14.1 billion. Chart 11 shows that India`s trade deficit with Australia has widened over the years: India`s exports to Australia have not grown at the same rate as its imports from Australia. Membership of the RCEP would have made India part of the rules of the world`s largest trade agreement.

It was also expected that the RCEP would push India to implement much-needed domestic policy reforms to make manufacturing more competitive. First, there are already bilateral free trade agreements with ASEAN, Korea and Japan in India, and negotiations with Australia and New Zealand; India knew these savings. China`s entry into the RCEP – with which India has a trade deficit of $54.7 billion in 2018 – half of the country`s total trade deficit – has worried Indian negotiators. This trade gap has widened considerably since China joined the World Trade Organization (WTO) in 2001. It was therefore worrying: how a new wave of liberalization under the RCEP, which would further reduce customs limits for more products, would exacerbate this large trade deficit. Given the growing trade deficit with Japan, India may also have to compensate in other areas, such as investment. Finally, India is considered one of the main investment objectives for Japanese companies. [15] Overall, India`s current share of the EU as a whole in Japan remains low. Total investment from Japan between 2000 and June 2019 was about $32 billion (Japan is the third largest investor in India.

[16]) Japanese direct investment in India has mainly occurred in the automotive, appliance, telecommunications, chemical, finance (insurance) and pharmaceutical sectors. In 2014, India launched a Japan Plus program that proposed that Japan invest 3,500 billion yen ($33.5 billion) in India over the next five years, through public and private investment and financing. [17] It is outside the scope of this mandate to examine these investments, but argues that India should address the main obstacles facing Japanese investors. Slower and more sustainable integration into a trade agreement such as the RCEP would have corresponded to India. Now that India is not part of the RCEP, the country must begin the long reforms of the national sector. This should be done meticulously and in mission mode. The agreement for South Korea added to a large list of bilateral and multilateral free trade agreements

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