Title: Korea-India CEPA To Be Officially Signed In Seoul
- Korea to secure a foothold in a newly emerging economy ahead of other competing nations such as Japan, 
    China and EU
- Liberalization of agricultural and marine sectors expected to be at minimum levels

1. Minister for Trade Kim Jong-Hoon and Commerce Minister of India Anand Sharma are scheduled to sign 
    the Korea-India Comprehensive Economic Partnership Agreement (CEPA) in Seoul on August 7, 2009.

※ Comprehensive Economic Partnership Agreement (CEPA): The term was adopted to emphasize the 
   comprehensive nature of the economic relationship that covers the trade of goods and services, 
   investment and economic cooperation which is substantially the same as an FTA.

※ Negotiations for the Korea-India CEPA were launched in March 2006. Korea and India reached an 
   agreement on the final version of the agreement at the 12th round of negotiations in September 2008. 
   The two countries signed a preliminary agreement on February 9, 2009.

2. The Korean government plans to submit the ratification agreement bill and obtain approval at the regular 
   session of the National Assembly in September 2009 so that the Agreement may be put into effect on 
   January 1, 2010.

- For India, the official signing will immediately put the Agreement into effect since no further domestic 
   procedures are required.

3. Once the Korea-India CEPA enters into force, India will eliminate or reduce tariffs on 85 percent of South 
   Korean goods on the basis of products and revenue figures. This includes Korea’s top ten export products 
   to India which include auto parts, steel, machinery, chemicals and electronics. 108 products produced in 
   Kae-sung Industrial Complex will also receive preferential treatment.

- Korea will eliminate or reduce tariffs on 93 percent and 90 percent of Indian goods on the basis of
   products and revenue figures respectively. Taking into account India’s high tariff rate, the benefits of tariff 
   elimination and reduction are expected to be substantial. The effects of the partial liberalization of the 
   agricultural, marine and forestry sectors, which both countries find sensitive, are expected to be 
   insignificant.

※ A tariff rate of 5~15% will be applied to Korea’s goods exported to India, which are mainly whole products. 
   A lower tariff rate of 1~2% or 0% will be applied to Indian products exported to Korea, which are mainly 
   raw materials.

- 1) Color TV (12.5%), auto parts (12.5%), auto engines (12.5%), steel plate (5~10%)

- 2) Naphtha (1%), Soybean oil (1.8%), hematite (1%), rape (0%)

4. The Korea-India CEPA also aims for a high level of liberalization in the services and investment sector.

- India’s services market including telecommunications, construction, distribution (retail excluded), 
   advertisement, entertainment, delivery service and industrial service (accounting, building, real estate, 
   medical service, energy distribution) will additionally be liberalized. Also, Korean companies’ investment
   in India will be liberalized across the overall manufacturing industry, and the scope of Investor-State 
   Dispute Settlement (ISD) will be expanded as it has been in the KORUS FTA.

- The Agreement will mutually expand job opportunities for computer specialists, engineers, managing 
   consultants, machine and telecommunications technicians, English teachers, scientists and advertising 
   experts of the two countries.

5. The Korea-India CEPA is expected to increase the volume of trade and investment between the two 
   countries by an even larger amount, considering India’s rapid economic development. In particular, goods 
   with high potential of export such as diesel engines, railroad trains, elevators are included in the list of 
   items of prospective trade liberalization. As investing conditions in India improve, Korea’s export to India 
   which has shown an annual growth rate of over 20% is expected to grow even more.

- The significance of the conclusion of the Agreement, above anything else, lies in the fact that Korea was 
   able to seize the opportunity to secure a foothold in the Indian market ahead of other competing nations. 
   As a BRIC nation, India has an enormous market of 1.15 billion people and is the fourth-largest market 
   in terms of GDP purchasing power parity. Currently, Japan and the EU are negotiating the terms of the 
   agreement, and China and India are at the joint study stage. They have not been able to start the 
   negotiation process yet.

- Korea has seen a sharp decrease in its market share in the Indian market due to China’s competitively 
   priced products. It has also been outpaced by Japan since 2008. Fortunately, however, the Korea-India 
   CEPA is expected to provide a competitive advantage to Korean companies that are competing with those 
   from China and Japan.

6. The Korea-India CEPA is significant in the sense that both countries expressed their strong will to fight 
   protectionism despite the formidable challenges of the global economic crisis. The Agreement is 
   expected to greatly contribute to strengthening Korea’s diplomatic ties with India, which has an influential 
   standing in the international community.

7. For details regarding the Korea-India CEPA, please refer to the attached file. The Korea-India CEPA text 
   will be uploaded on the Ministry of Foreign Affairs’ FTA website (www.fta.go.kr) after the official signing.

* unofficial translation