Gains from India-Korea CEPA

Pravakar Sahoo, Durgesh Kumar Rai and Rajiv Kumar

Foreign Trade Review, 2009, vol. 44, issue 3, 57-80

Abstract: The signing of India-Korea CEPA on 7 August 2009 is considered a welcome step in India's “Look Fast†policy. It is a significant move in fostering a regional integration by both sides. The increase in merchandise bilateral trade has largely been attributed to changing demand structure and comparative advantages of both the economies in complementary sectors. The successful completion of CEPA is timely and supported by increasing trade complementarity index (TCI) which shows both the countries' trade has gradually become more compatible over the period. Further, the intra-industry trade (IIT) analysis shows that IIT is low in top traded product groups and high in some products where trading is low thereby offering huge opportunity for intra-industry trade when sector specific barriers will be removed after CEPA enforcement. The substantial reduction of both tariffs and non-tariff barriers in a phased manner would take India-Korea relations to a higher level and also India's presence in East Asia. Apart from increase in trade, the two positive results expected due to the agreement are increase in Korean FDI inflows into Indian manufacturing and outflow of professionals from India to Korea.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:sae:fortra:v:44:y:2009:i:3:p:57-80

DOI: 10.1177/0015732515090303

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