KITA Suggests Tips For Indian Cos. To Do Business With Korea, Tips For Indian Companies, How To Do Business With Korea, Korea International Trade Association Suggest Tips For Indian Companies

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SME Times News Bureau | 14 May, 2010
Wang-Gyu Yee, Executive Managing Director of Overseas Marketing Headquarters of the Korea International Trade Association (KITA), in an exclusive interview to SME Times, suggests tips for the Indian companies who are looking to do business with Korea for buying & selling of goods.

Excerpts of the interview...

Firstly, congratulations on signing the MoU with tradeindia.com. How do you see this development in the context of helping exporters of both nations?
Wang-Gyu Yee: The Korea International Trade Association (KITA) and Infocom Network Ltd. exchanged a Letter of Intent in March of this year. On April 8, 2010, KITA and Infocom Network Ltd signed an MOU on cooperation in the following areas: open "Korean Product Trade Show" on tradeKorea.com/tradeindia.com, send out e-DMs to members, and organize online/offline business matching events between Indian and Korean companies.

The MOU between KITA and tradeindia.com will provide exporters from India and Korea with support in tapping into each otherâs market through online marketing platforms. Moreover, they will have chances to spread their reach into each market through the various offline events that we plan to co-organize later in the year. The MOU will be a turning point for expansion of trade between our two countries.

How do you see the Indian market in near future as a favorable destination for Korean companies?
Wang-Gyu Yee: According to Global Insight, India has the second highest growth potential among BRICs countries after China and has maintained an average annual growth of 8.2% during the last 5 years. There are also projections that the Indian middle class will be more than 40% of the Indian population in 2025. Korean companies are keeping note of these factors and keen to take as much advantage of it as possible. We expect tremendous growth in exports, imports, and investment with India. India will surely rise as one of Koreaâs important trading partners in the years to come.

South Korea and India signed the Comprehensive Economic Partnership Agreement (CEPA) in August last year, which came into effect January 1. How do you see Indo-Korea trade relations after the CEPA came into effect?
Wang-Gyu Yee: India has the worldâs second largest population and the fourth largest consumer market. By 2050, it is expected to become the next world economic power. Korean companies realize the great potential that the Indian market has. However, India has not been considered an easy target due to the far distance (farthest Asian country to the west of Korea) and the cultural differences between our countries.

Korea-India trade has continuously grown during the past 10 years. India ranked 25th place as Koreaâs export destination in the year 2000. Now it is Koreaâs 9th export partner. Thanks to the Korea-India CEPA, bilateral trade in January-February 2010 increased two-fold year-on-year. As you can see, we are already seeing the positive impact. With the CEPA in place, I believe that our trade relations will grow stronger and expand into new areas, and lead to more investment.

Please give our readers a brief idea on the goods that are being traded under the agreement?
Wang-Gyu Yee: The Korea-India CEPA covers all product areas from agricultural products to manufactured goods. The tariff reduction and elimination schedules in the CEPA agreement are based on our mutually complementary industry structure. According to a report by the Korean government, the terms of trade are expected to improve for India in chemicals, textiles, and machinery. As for Korea, terms of trade in electronic goods, machinery, steel and automobile parts are expected to improve.

With the lowered tariff barriers from the agreement, do you think that small Korean exporters will have a sharper edge in overall price competitiveness?
Wang-Gyu Yee: Before the CEPA, Korean exports faced high tariffs in the Indian market. Now Korean exporters have an advantage over Japanese and Chinese competitors who do not receive preferential treatment under a free trade agreement. This small difference from lower or no tariffs will make a big difference to small and medium size exporters in Korea that wish to sell products in India.

As figures communicate China has been Korea's big trading partner. Do you think with CEPA in place business growth among our countries will have any bearing on Korea & China trade?
Wang-Gyu Yee: India is the first BRICs country to conclude an FTA with Korea. This gives India a head start into the Korean market. Although, Korea and China are studying the feasibility of an FTA, it will take some time for the actual negotiations to begin, to be concluded and ratified by each government. Therefore, the Indian business community should take advantage of the price competitiveness resulting from the CEPA and actively seek new business opportunities with Korean partners.

From Koreaâs past FTA experience, there have been cases where trade of a certain good was diverted from a non-FTA partner to an FTA partner country. This serves as proof that India may be able to capture some of Koreaâs trade with China and other countries. Of course, this will depend on the efforts of the Indian companies. I believe Korean companies will change their import source of primary goods such as agricultural products and raw materials, and electrical goods from China to India.

In your views, how imperative is online or B2B marketing for present exporters especially for small exporters?
Wang-Gyu Yee: With the recent growth of the Internet environment and e-commerce market, many export companies are getting interested in paperless trade and e-marketing. Unfortunately, small exporters do not have the financial and human resources that larger companies have and thus cannot invest as much in marketing their products.

For these small exporters, the Internet and online B2B portals such as tradeKorea.com and tradeindia.com can be the key to finding new business opportunities. Online marketing can help them save both time and money in doing business. With developed IT infrastructure and diverse market, we believe that India is the right partner for cooperating in online B2B marketing.

Although many Korean export companies realize the necessity of online marketing, we discover that many companies still think that e-marketing is difficult or they have not even considered trying it out. We think that this is mainly due to the language barriers, technical barriers and lack of promotion. KITA plans to continue to host training programs to enlighten and educate Korean companies on the many possibilities that e-marketing has.

You are the Executive Managing Director of KITA. Please tell our readers the initiatives taken by the organisation to facilitate trade between India and Korea?
Wang-Gyu Yee: This year KITA took India as one of the target countries in overseas marketing. KITAâs goal is providing all-round support to Korean companies that are looking to enter the Indian market and facilitating trade growth between our countries. KITA plans to host various online/offline business events throughout this year: âKorean Product Trade Showâ on tradeindia.com, various conferences on the Indian investment climate, customs clearance and logistics process, trade mission to India, and offline business matching event.

We are opening an online Korean Product Trade Show on tradeindia.com and tradeKorea.com. Later this year in November, we plan to invite Indian and ASEAN buyers to Korea and organize a 1:1 business matching event in Seoul. With the CEPA in place, India and Korea have a lot of growth potential. We will continue to expand bilateral trade through close cooperation with tradeindia.com.

Any suggestions/tips for the Indian companies who are looking to do business with Korea for buying & selling of goods?
Wang-Gyu Yee: First, I would advise Indian companies to take full advantage of the Korea-India CEPA. There is a lot of interest in the Indian market right now and Korean companies are well aware that the Korea-India CEPA is in effect. Indian suppliers with products that have eliminated or lower tariffs from the CEPA should actively look for business with Korean partners. Indian buyers should also keep in mind that they can obtain high quality Korean goods at a better price through the CEPAâs tariff reduction.
On the other hand, India has had a long-time trade deficit with Korea. The CEPA will help increase trade in different areas and balance Indiaâs trade deficit.

Second, Indian buyers and suppliers should keep on the lookout for KITAâs online/offline trade promotion activities. As I mentioned above, this year KITA will host several events to promote business between our two countries. We ask Indian companies to keep interested and welcome their active participation in these events.

Lastly, Korean products have world-class quality and reasonable prices. Korea is also a developed trading country, ranking 10th place in the world. Koreans have a friendly sentiment towards Indian people, making it the trade partner with which we can see fact results from online B2B trade.