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KOREA-INDIA BILATERAL TRADE (Unit: US$) 5.48 billion 6.71 billion 9.17 billion 11.22 billion 2004 2005 2006 2007 2008 Source : Korea International Trade Association Yonhapnews Agency 15.56 billion Mahabodhi Temple is a famous symbol of architecture in India (above). Hyundai Motor is the second largest company in India’s auto sector (opposite). LEADING TO MORE COMPETITION Likely thanks to this prospect, Korean companies are flocking to India. There are an estimated 400 Korean companies there — 200 in New Delhi, 150 in Chennai and 50 in Mumbai. Among them, about 150 went to India within the last three years. And with the CEPA in effect, the number of Korean firms in India is expected to skyrocket. Under the CEPA, 85 percent of Korea’s leading export goods will either be free of tariffs or have them reduced. Of 5,227 goods, 202 had their tariffs scrapped immediately, 180 will see their tariffs abolished over the next five years, and another 3,358 goods over the next eight years. The automobile industry is the biggest beneficiary. The 12.5 percent tariff will be cut to 1 to 5 percent within eight years. Hyundai Motor, which is No 2 in the Indian market, should eat into the lead currently held by Suzuki of Japan. “The Indian market is structured so that you secure your <strong>net</strong>works, it’s difficult for latecomers to break into them,” said an auto parts industry figure. “The CEPA will give us an upper hand over our existing competition and over companies from countries that try to reach a deal with India later.” The two sides agreed to open the service sector to a higher degree than would be done according to the Doha Development Agenda currently under negotiation. In other words, Korea would have an expanded opportunity to enter medical, communication, energy retailing, shipping, construction, distribution (excluding retailing), advertising and entertainment markets. The financial market has also opened up so that Korean banks can add up to 10 Indian local branches within the first four years of the CEPA. The economic effect following the CEPA agreement is significant. The Korea Institute for Industrial Economics and Trade forecast that the manufacturing export would grow by an average of US$177 million (3.9 percent) over the next 10 years, while the import by US$37 million (1.6 percent) and the trade surplus by US$140 million over the same span. The Korea Institute for International Economic Policy estimated that the trade volume would rise by US$3.9 billion and the GDP by 0.18 percent (US$7.78 trillion), while about 50,000 jobs would be created. The two institutes picked automobiles, machinery, chemistry, electricity and electronics as industries that would benefit from the CEPA. Also, though they aren’t currently exporting, diesel engines, locomotive trains and elevators are thought to be new industries that will thrive under the CEPA. The CEPA’s impact doesn’t stop at increased sales and investments. The deal also tears down the invisible barrier between the two economies. The construction of POSCO’s Indian steel mill, set to produce 12 million tons per year, has been delayed for years due to problems in compensating the local residents and with the local authorities’ lukewarm responses. After three and a half years of stalemate, POSCO finally began the work on the US$12 billion mega integrated steel plant in Orissa province last October. POSCO explained that the central Indian government’s insistence that investments by a Korean company must be put through under the CEPA-helped construction get started. Korean companies are thriving in India already. Samsung Electronics and LG Electronics are battling for top spot in the Indian consumer electronics market. Hyundai Motor is the second largest player in the auto sector. According to figures from January to September last year, Korea has zipped past Britain, Russia and Canada in terms of exports to reach No 9 in the world, climbing three spots from 2008. It ranked 85 th in 1950, 26 th in 1980 and then hovered around 11 th and 12 th from the 1990s. Since the 1950s, only Japan and China were new entries in the top 10 in terms of exports. And solid export figures compared to its competition helped make Korea bounce back quickest from the economic crisis among OECD member nations. The trade surplus of US$42 billion last year was a record high, bigger than that of Japan. 42 KOREA FEBRUARY 2010
Seoul Economy Daily SEARCHING FOR THE BLUE OCEAN In India, Samsung mobile phones are known as a symbol of wealth. They sell like hot cakes. When rivals such as Motorola lowered their prices, Samsung targeted the middle class with higher-end products and successfully carved its own niche. Thanks to this success, Samsung is right on the heels of the market leader Motorola. Based on thorough market research to separate itself from the competition, Samsung accurately predicted that the rising middle class would lead to the expansion of a consumers market, and introducing customized products was right on the money. “The painstaking field research, covering from top to bottom helped us nail the potential consumer group, and that played an important role in entering the market,” said a Samsung official. “In particular, high-end, customized products appeared to have captured consumers’ hearts.” Aside from mobile phones, Samsung is the Indian market leader for color television, LCD TVs and PDP TVs. LG Electronics is the No 1 seller. Samsung maintains the lead in sales revenues, which goes to prove how luxurious of a brand Samsung is in India. “To attack the Indian market and its unlimited potentials, we will continue to maintain premium strategies in production and in marketing,” said an official of Samsung’s Indian branch. “At the same time, we will pursue localized strategies to satisfy Indian consumers to bolster our standing as the No 1 in the market.” Korea, which has become a strong trade nation, is considered a passionate champion of free trade. It has FTAs with Chile, Singapore, the European Free Trade Association and ASEAN. According to the Ministry of Knowledge Economy, Korea’s trades with these nations jumped by as little as 20.5 percent and by as much as 31.6 percent after the FTAs took effect. In addition, Korea’s FTAs with the United States and the EU are poised to take effect. Korea would be the only nation to have free trade deals with the two major pillars of the world economy. When these two deals take effect, Korea’s FTA partners would account for 34 percent of all Korean trade, compared to 11 to 12 percent today. Also, Korea is preparing to reach FTAs with China, Japan, Gulf Cooperation Council and other 15 economies. Korea stands to become the nation who trades with most major economies virtually free. KOREA FEBRUARY 2010 43
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Page 3 and 4: PRELUDE The Beauty of Korea Located
Page 5 and 6: TRAVEL 26 Inje, which lies on the e
Page 7 and 8: When a massive tsunami approached t
Page 9 and 10: Joon-ho’s The Host (2006) was als
Page 11 and 12: efore after before after Still and
Page 13 and 14: other such movies, with companies a
Page 15 and 16: Q How did you end up working overse
Page 17 and 18: Zip Cinema Stills from the recently
Page 19 and 20: DEEP INTO THE WORLD OF EVERYDAY LIF
Page 21 and 22: into obscurity again, the point is
Page 23 and 24: THE ART OF SHARING A cafe can serve
Page 25 and 26: As soon as “Art for Life” opene
Page 27 and 28: Art for Life COOKING CULTURE One of
Page 29 and 30: The Road to Baekdamsa temple
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Page 34 and 35: MY KOREA Singin’ in the ROOM ----
Page 36 and 37: less singing at one. After much pro
Page 38 and 39: SUMMIT DIPLOMACY KOREA TO BUILD NUC
Page 40 and 41: NEW REACTOR TECHNOLOGY The APR 1400
Page 42 and 43: GLOBAL KOREA INDIA’S MAMMOTH MARK
Page 46 and 47: NOW IN KOREA
Page 48 and 49: AP Photo / The Canadian Press, Darr
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