South Korea approves free trade deal with India

SEOUL (Reuters) - South Korea's parliament on Friday ratified a free trade deal with India, opening the way to the elimination or lowering of tariffs on more than $15 billion in annual bilateral trade with Asia's third largest economy.

The trade pact, which does not require ratification by India, could nearly double the volume of trade between the two sides, India's trade minister has said.

The deal is the first by India with a developed economy and South Korea's eighth free trade pact, including deals to open up markets with the United States and the European Union that have yet to be implemented.

The pact with the EU is expected to be approved by South Korea's parliament much quicker than the U.S. deal, which has also been unpopular with some Democrats in the U.S. Congress.

The South Korea-India deal will eliminate tariffs on three quarters of India's imports from South Korea by value, and more than 80 percent of South Korea's imports from India.

A study by the state-run Korea Institute for International Economic Policy said the pact could boost annual two-way trade by $3.3 billion in the near term and raise South Korea's GDP by 1.3 trillion won ($1.06 billion).

South Korea's main exports to India are auto parts, petroleum products, and mobile phones. Its largest import from India is naphtha, accounting for more than half of imports in 2008.

(Reporting by Jack Kim; Editing by Jonathan Hopfner)