India’s US$1.2 trillion economy may this year expand at the fastest pace in Asia after China, according to International Monetary Fund data, giving South Korean companies opportunities to boost sales as the North Asian economy shrinks. Singapore’s exports to India excluding oil products more than doubled in the two years after they signed a similar accord in 2005, turning the city state’s deficit to a surplus, according to government data.

“The pact will be beneficial for both the countries as it will further open the markets and give an opportunity to companies to benefit,” said N. R. Bhanumurthy, an economist at the Institute of Economic Growth in New Delhi. “Such economic engagements will help strengthen both the economies in the long-term.”

The agreement between Asia’s third- and fourth-largest economies needs ratification by the South Korean legislature. India’s legislature doesn’t need to separately ratify the deal, South Korea said.

Other South Korean goods covered include marine tankers, machinery parts and synthetic rubber. The deal involves about 90 percent of Indian exports, including polycarbonates, leather, industrial diamonds, gasoline and corn for livestock.

Bilateral trade between India and South Korea rose 39 percent last year to $15.6 billion. South Korea exported $3.6 billion of goods to India, and imported $1.6 billion in the first six months of this year.

Source: Bloomberg