India-Korea trade imbalance as more Korean manufacturing Cos. investing & importing intermediate goods: Korean envoy

REDUCING INDIA-KOREA TRADE DEFICIT:

NEW DELHI: While reasoning the persistent higher imports from South Korea in comparison to exports from India, Chang Jae-bok, Ambassador of the Republic of Korea to India has said that it was because more and more South Korean companies are investing in India. These companies are importing intermediate goods to produce finished products locally –a necessary process to help India making its ‘Make in India’  policy a success. He, however, clarified that the recent years have witnessed a reducing trade deficit gap between the two countries.

An intermediate good is a product used to produce a final good or finished product.

Ambassador Chang was recently speaking at the India Korea Business Partnership Forum organized by Confederation of Indian Industry (CII) in partnership with Korea International Trade Association (KITA) in New Delhi.

“As regards the trade imbalance between Korea and India, the trade deficit from India to Korea is because more and more Korean manufacturing companies are investing in India and importing intermediate goods. It’s a necessary process to help India in industrialization and Make in India  policy a success,” said Ambassador Chang adding that the trade deficit gap between the two countries, however, had been reducing gradually, especially in last few years.

However, the trade deficit between the two countries was USD 10.2 billion in 2017, and it further reduced to USD 9.8 billion in 2018, to USD 9.5 billion in 2019, and to USD 7.1 billion in 2020.

Ambassador went on to advise that India  should look beyond mere numbers. “Beyond numbers, we should be able to see the benefits of investment of Korean manufacturing companies in India such as improving the quality of lives of the Indian people and economic development of India through creating jobs, increasing exports, and transfer of technology,” .