India and South Korea are working towards deepening their economic relationship by upgrading the Comprehensive Economic Partnership Agreement (CEPA) and promoting balanced trade and investment between the two nations. The recent discussions were held in Laos, between India’s Commerce and Industry Minister, Piyush Goyal, and his South Korean counterpart, Inkyo Cheong. Goyal shared on social media platform ‘X’ that the focus was on enhancing CEPA for fairer trade, removing non-tariff barriers, and encouraging investments that create jobs.
Efforts to Enhance CEPA for Balanced Trade
The CEPA between India and South Korea was first implemented in January 2010, and since then, multiple review meetings have been conducted to revise and improve the agreement. More than 10 rounds of review talks have already taken place, with both countries pushing for better market access for products on the negative list. Goods under this list are excluded from customs duty concessions, leading to trade limitations.
India Seeks Greater Market Access for Key Products
India has particularly sought more access for products like steel, rice, and shrimp to increase exports to South Korea. Indian officials raised concerns about South Korean companies not purchasing Indian steel, which has led to a growing trade deficit. India’s exports to South Korea have been declining, from $8 billion in 2021-22 to $6.41 billion in 2023-24. Meanwhile, imports from Korea stood at $21.13 billion in the last fiscal year, reflecting an imbalance in trade.
Importance of CEPA Review
Both countries believe that the CEPA upgrade will strengthen their economic ties and further liberalize trade. The review process also focuses on issues such as rules of origin, customs procedures, verification processes, and improved trade data sharing. India’s concerns about the rising trade deficit and limited market access highlight the need for revisions to ensure a more balanced trade relationship between the two nations.
By addressing these issues, India and South Korea are working towards enhancing their partnership, making trade smoother, and encouraging investments for mutual growth.
