India and South Korea on Saturday discussed upgrading the existing free trade agreement (FTA), balancing mutual commerce and promoting investments between the two countries. These issues were discussed during a meeting between Commerce and Industry Minister Piyush Goyal and his Korean counterpart Inkyo Cheong in Laos. “Discussions were held on upgrading the India-Korea Comprehensive Economic Partnership Agreement (CEPA) for more balanced trade, promoting investments linked to job creation and removing non-tariff barriers to further strengthen our economic ties,” Goyal posted on social media platform ‘X’.
More than 10 rounds of review talks have taken place
The two countries have been holding review meetings to upgrade the CEPA, which was executed in January 2010. More than 10 rounds of review talks have been held so far. Both countries have sought greater market access for certain products, which are included in the agreement’s negative list. No customs duty concessions are given for goods falling under this list. The commerce department had earlier worked with various ministries, including heavy industries, steel and chemicals, to prepare the proposal list.
India demands greater market access
India has sought greater market access for certain products such as steel, rice and shrimp from South Korea to boost exports of these items. India has expressed concern over Korean companies not buying Indian steel. This review exercise is important as both sides have expressed hope that the CEPA upgrading talks will play an important role in strengthening and deepening economic cooperation between the two countries. Generally, such a review or upgrading process involves implementation issues, rules of origin, verification procedures and clearance of consignments, customs procedures, further liberalisation of trade in goods, and sharing and exchange of trade data. India has also raised concerns over the growing trade deficit between the two countries. India’s exports to Korea are projected to decline to $6.41 billion in 2023-24 from $6.65 billion in 2022-23 and $8 billion in 2021-22. Imports stood at $21.13 billion in the previous fiscal, while it was $21.22 billion in 2022-23 and $17.5 billion in 2021-22.
