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India and Korea begin review of trade pact – Industry News
Talks between India and Korea on the revision of the Comprehensive Economic Partnership Agreement (CEPA) made significant progress, with both sides exchanging the list of “requests” where they want greater trade opening.
On the Korean side, demand came from sectors such as automobiles, textiles, chemicals and petrochemicals, while India is seeking greater access to Korean markets to steelrice, shrimp and clothes.
“The requests made by Korea are being discussed with the ministries of steel, textiles, chemicals and petrochemicals and heavy industries. Based on the discussions, the order offers will be finalized,” said a senior official.
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The CEPA review has been painfully slow, as both parties approach the issue from different points of view. Korea seeks to expand the agreement, while India seeks a review to resolve the growing trade deficit with Korea. The revision of CEPA – which was signed in 2009 and came into force in 2010 – was agreed in 2016. Since then, ten rounds of talks have been held. The last round of discussions on the topic was held at the beginning of this year. Some Korean officials have officially stated that negotiations may finally be concluded in 2024, but the dates for the next round of talks have not yet been finalized. Officials say the next dates for the next round of talks will be finalized when both sides are ready with their offers.
According to experts, Korea’s attempt is to increase the level of openness of the Indian market Marketplace or at least equate it with the India-Japan FTA. From South Korea’s perspective, the effectiveness of bilateral trade liberalization has been questioned, as key export sectors such as automobiles have been excluded from concessions.
Indian exporters complained about the reluctance of the Korean market industry buying items like steel from India despite the competitiveness. Clothing manufacturers have complained that safety standards are kept so high that they make exports difficult.
The agreement covers trade in goods, investments, services and bilateral cooperation in areas of common interest. Under CEPA, Korea was to eliminate/phase out tariffs on 90 percent of Indian exports, while India would eliminate/phase out tariffs on 85 percent of Korean exports.
Total merchandise trade between India and South Korea grew from $16.91 billion in 2011 to $27.5 billion last year. While India’s exports remained in the range of $5-7 billion during the period, imports increased from $12.4 billion in 2011 to $21.1 billion in 2023-24.