Widen scope of India-Korea CEPA, add defense, future mobility items to encourage SMEs: CIPA
Negotiations to expand the scope of the Comprehensive Economic Partnership Agreement between India and Korea have been progressing at a slow pace for years.
NEW DELHI: Looking forward to India collaborating with Indian industries in the defense and future mobility sector on a massive scale, South Korea has called upon India to be considerate about the concerns of small and medium industries that wish to come to India to invest. Korea has urged the Indian government to widen the scope of the Comprehensive Economic Partnership Agreement (CEPA) and add more items such as defense equipment, biofuel cells, robotics, drones, and other future mobility products to encourage Korean investment.
While asserting that CEPA forms the core basis for economic cooperation between India and South Korea, Choi Byeong Kil, Head Representative of the Defense and Future Mobility Delegation, Changwon Industry Promotion Agency (CIPA), said that India was a fast-emerging economy and with Korean cooperation, it could grow even faster.
“Because of the ‘Make in India’ initiative of the Indian government, the emphasis is being laid on producing products domestically in India. It is a very good move to encourage industrial growth in India. However, small and medium companies are not able to import or trade because of high customs duty rates. Nor can they afford to come to India straight and set up their production units because of limited means available to them unlike large companies,” Choi Byeong Kil told Asian Community News Network in an exclusive interview during his recent visit to New Delhi.
The Changwon Industry Promotion Agency (CIPA), the Ministry of SMEs, Startups (Gyeongnam Regional SMEs and Startups office), and the Korea Federation of SMEs (K-BIZ), are on a 4-day mission to India and are leading a delegation of Korean SMEs from Changwon province, the mecca of the defense industry in Korea. On Thursday, the delegation interacted with approximately 50 Indian companies in New Delhi, including prominent names like L&T, Tata, Mahindra, and others.
“Therefore, it is extremely important that the scope of CEPA be widened fast and both countries close the negotiations on it. With this, the Korean SMEs can initiate trading and exports to India for a couple of years to start with before taking their decision to set up their production facilities in India,” said Choi Byeong Kil.
He said, “India at present has about 850 Korean companies operating in India. However, the number of Korean companies is multifold in countries like China. Many Korean companies are withdrawing from China and shifting to Southeast Asian countries – Vietnam. Thailand and Indonesia but are skipping India.”
Ms. Yi Z-Eon, Assistant Director, Regional Business Policy Division, Ministry of SMEs and Startups, Korea, said that more and more cooperation between the ministries of SMEs and Startups of both nations was required.
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“Korean economy is export-oriented with its presence across the globe. We look at India not only as a large consumer market but also as an efficient product base because of factors such as affordable labor. India has an excellent talent pool of English language speaking young people. The focus of Korean companies is drifting from China to other alternate locations such as Vietnam, and other Southeast Asian countries but India is a better option,” Ms. Yi Z-Eon added.
She said that therefore closer cooperation between the governments of India and Korea is required in the SME sector and a Memorandum of Understanding between the two sides should be signed in this sector.
