Korea had pushed for reducing tariffs on 17 items including some sensitive products such as automobiles and certain grades of steel, which India resisted on grounds of the move hurting domestic industry.
In a move that will reduce its $12 billion trade deficit with South Korea, India can now export greater amounts of shrimp, beer and processed foods at lower duties. Indian yoga instructors can also setup their schools in the East Asian country in exchange of Korean taekwondo teachers imparting training of the martial art here. New Delhi has also managed to secure extended visas for intra-corporate transferees. Indian nationals working in Korean firms will now get a work permit for three years instead of one year, as mandated earlier, as per the revised India-Korea free trade agreement called comprehensive economic partnership agreement (CEPA). New Delhi will now be able to sell 15,000 tonne of shrimp at zero duty. “Shrimp and beer were excluded from concessions in the last CEPA but we have got them now,” said an official. However, India couldn’t convince Korea to reduce duties on sesame imports. “Earlier only yoga instructors could go to Korea but now yoga as a service can be provided under all four modes,” the official added. Korea has agreed to import Indian popcorn at a whopping 630% duty while duty on Indian beer would be eliminated to nil over the next ten years. Indian beer such as Kingfisher, which is a great hit among the Koreans was subject to a 30% tax till now. Similarly, exports of processed food like jams, marmalade and jellies, which are levied a 30% tax in Korea, would go on zero duty in the next ten years. The revised CEPA was signed on Tuesday in the presence of South Korean President Moon Jae-in, who is on a four-day visit to India. The two countries have set a target of increasing bilateral trade to $50 billion by 2030. Korea had pushed for reducing tariffs on 17 items including some sensitive products such as automobiles and certain grades of steel, which India resisted on grounds of the move hurting domestic industry. The two countries have agreed to reduce tariffs on 11 items under an early harvest programme. India, on its part, will halve the duty on Korean base oil imports to 2.5% over fifteen years and eliminate taxes on eau de cologne in ten years. India imports almost $1 billion of base oil. Korean flavoured instant coffee and synthetic rubber called EPDM will come into India at lower duty while the 5% tax on fish preparations would be eliminated in eight years. Indian mangoes, maize corn, castor oil, bakery items and other marine products will also make their way to Korea at lower duties, the official added.