India and South Korea have signed a revised double taxation avoidance pact and agreed to begin talks from mid next year to widen the scope of free trade pact to boost bilateral economic cooperation.

The agreement came during a summit meeting Prime Minister Narendra Modi held with South Korean President Park Geun-hye when they also called upon the business community in both the countries to leverage the enormous synergies between their economies for mutual prosperity.

They welcomed “commencement of negotiations to amend the India-Korea CEPA by June 2016 with a view to achieving qualitative and quantitative increase of trade through an agreed roadmap,” a joint statement issued after the meeting said.

India and South Korea had implemented the free trade pact, Comprehensive Economic Partnership Agreement (CEPA), in January 2010.

The statement further said the leaders also welcomed “signing of the revised Double Taxation Avoidance Agreement (DTAA)”.

The existing DTAA came into effect in 1986. Modi in his remarks said “we will also establish a channel Korea Plus to facilitate their investment and operations in India”.

Both the leaders shared the view that the trade between the two nations is well below potential.

“We agreed to review the Comprehensive Economic Partnership Agreement and other market access related issues.  I conveyed our desire to see a balanced and broad-based growth in bilateral trade,” Modi added.

The bilateral trade is in favour of South Korea. Trade deficit increased from USD 5.1 billion in 2009-10 to USD 8.27 billion in 2013-14.

The Ministry of Strategy and Finance and the Export- Import Bank of Korea expressed their intention to provide USD 10 billion for mutual cooperation in infrastructure, the statement said.