South Korean companies should be prepared for fierce competition with Japanese rivals in India following New Delhi's signing of a free trade agreement with Tokyo, a local trade body said Sunday.
Japan and India signed a comprehensive economic partnership agreement (CEPA) in February, which, once implemented, will remove around 94 percent of import tariffs on both sides, according to a report by the Institute for International Trade.
South Korea and India signed a similar trade deal in August 2009 and the agreement came into force at the beginning of last year. The South Korea-India trade deal, however, eliminated only 80 percent of import duties.
"South Korean firms need to take measures to boost price competitiveness and marketing in India as Japanese companies are set to expand their presence there," the institute said in a report.
Japan is already South Korea's largest competitor in India, the world's second most populous nation and fourth-largest market.
"The Japan-India CEPA may come into effect before the end of the year at the earliest, which makes it more urgent for our country to carefully review its strategies and any change of conditions in the Indian market," it said.