For Republic Day, India invites ... South Korea?
For its 61st Republic Day Tuesday, India chose as its foreign honoree the president of South Korea – a nod to his country's role in building badly needed infrastructure and to India’s growing trade within Asia.
India invited the South Korean president to attend its 61st Republic Day Tuesday, an honor that’s become a tool of Delhi’s foreign policy in much the same manner as Washington’s White House state dinner.Skip to next paragraph
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At first glance, these two nations have about as much in common as kimchi and curry, although both support a legend that Koreans with the surnames Kim and Huh can trace their lineage back to an Indian princess in the first century.
Today, the connections are trade.
Since the end of the cold war, India has followed a “Look East” policy that calls for building deeper trade and security ties with Asian nations rather than focusing on Europe and America. India is now diving into economic integration with Asia, beginning with a new comprehensive trade deal with South Korea.
The relationship “is quite important in the sense that it goes with India’s ‘Look East’ policy,” says Pravakar Sahoo, an associate professor at the Institute of Economic Growth in New Delhi and coauthor of a study on the bilateral trade ties. “For the third and fourth largest economies in Asia, the trade between the two countries is quite low. There is huge potential.”
The deal signed in August, known as the Comprehensive Economic Partnership Agreement, hopes to unlock that potential. CEPA is India’s first free trade agreement with an OECD country – a club of wealthy nations – and goes beyond traditional trade deals by encompassing services and investment.
While India has opposed global free trade agreements out of concern for its farmers, New Delhi is aggressively pursuing these bilateral deals across Asia that sidestep the agricultural sector. India signed a similar pact in 2005 with Singapore.
The Korean deal is estimated to add up to $3.3 billion in annual trade between the two nations. Trade between India and South Korea has already jumped dramatically, rising to $15.6 billion last year, up from $2.6 billion in 2002.
Trade partners that fit
In economic relations, opposites can attract.