The agreement's slower tariff-removal rate underlines the importance Korea places on securing a foothold in the Indian market ahead of China and Japan, according to South Korea's trade ministry.

The deal with India addresses all aspects of goods and services trade, as well as investments.

In the service sector, India agreed to open its telecom, accounting, medical and advertising markets to South Korean companies with the exception of agriculture, fisheries and mining.

South Korean lenders will also be allowed to open branches in India.

South Korea will be able to invest in food processing, textiles, garments, chemicals, metals and machinery, according to the ministry.

Both sides also agreed to allow temporary migration of professionals such as computer programmers and engineers. South Korea had not offered such a commitment to any of its FTA partners before.