CURRENT UPDATE : INDIA, SOUTH KOREA INK MoU TO BOOST BILATERAL TRADE

INDIA, SOUTH KOREA INK MoU TO BOOST BILATERAL TRADE

India and South Korea on Thursday signed a Memorandum of Understanding (MoU) to enhance bilateral trade and investments.

"This (MoU) provides a platform where technical know-how of both the countries in developing infrastructure can be exchanged. It is also important to explore possibilities in the urban transport sector," said Minister of State for Urban Development Deepa Dasmunshi at the MoU signing ceremony in New Delhi.

The tripartite MoU was signed between engineering exporters' body EEPC India, industry body CII and the Korea Trade and Investment Promotion Agency (KOTRA).

"We are committing ourselves to boost mutual trade and investment so that both India and South Korea can shield themselves from the global headwinds which are blowing mainly from the western economies of the US and continental Europe," EEPC India Chairman Anupam Shah said.

India and South Korea had operationalised a Comprehensive Economic Cooperation Agreement in 2010.

The MoU is likely to improve the flow of information between India and South Korea which is key to the business communities of the two countries.

The business to business contact will also be improved through trade fairs, exhibitions, seminars and other promotional activities.

The signing of the MoU coincides with the visit of Korean President Park Geun-hye to India.

Although India's exports to South Korea have grown well, the overall trade remains highly skewed in favour of the latter.

Against imports of over USD 13 billion, Indias exports to Korea were just about USD four billion in the fiscal year ended March 31, 2013.

"We want to correct the trade imbalance through a push to our exports, particularly of the high-tech and value-added engineering goods," Shah said.

Main Indian exports to Korea comprise petroleum products, cotton yarn, ferro-alloys, unwrought aluminum and zinc, metal scrap, oil cakes, iron-ore, sesame seeds and marine products.

Major Korean export items include automobile parts and accessories, telecom equipments, ships, petroleum products and hot rolled products of iron.

South Korean investment in India is centered around Chennai, Pune, Noida and Gurgaon.

Manufacturing accounts for about 84 per cent of the South Korean investments, wholesale & retail trade (7 per cent) and financial and insurance activities (4 per cent).

Around 600 Korean companies have business operations in India and the major ones include Hyundai Motor, Samsung, LG Electronics, Hyundai Mobis, Wia Corporate, Lotte Group, Doosan Heavy Industries and Posco.

Tata Motors and Mahindra and Mahindra are among the Indian companies which have major investments in Korea.