The Korean and Indian governments start negotiations in June next year or earlier for improving their Comprehensive Economic Partnership Agreement (CEPA).
According to the current CEPA, only an 85 percent tariff concession is applied to India and no less than 13.8 percent of items of trade are subject to incomplete tariff elimination. Besides, the rates of use of the CEPA stand at 56.3 percent for export and 67 percent for import, which are much lower than those of the KORUS FTA (76 percent), Korea-EU FTA (85 percent) and Korea-Chile FTA (80 percent).
It is expected that the Korean government will provide financial support worth US$10 billion for infrastructure projects in India, while Korean companies will be given opportunities to participate in the projects for Ganges River purification, high-speed railway construction, smart grid construction, and alternative energy development. At present, India’s power supply rate stands at 75 percent. The Indian government is planning to invest US$100 billion into the alternative energy industry and smart grid construction by 2020.
In addition, India promised that it would set up the Korea Plus Center in the Prime Minister’s Office so that Korean companies doing business in India can get some help in coping with their difficulties.
In the meantime, Indian Prime Minister Narendra Modi meets with Hyundai Motor Group chairman Chung Mong-koo today to ask for the construction of its third plant in India. Also, meetings are scheduled between the Prime Minister and Samsung Electronics President Shin Jong-kyun and POSCO Chairman Kwon Oh-joon.