India and South Korea Discuss Upgrading Trade Agreement

On 21st September, 2024, India and South Korea convened to discuss enhancements to their existing free trade agreement, aiming to balance bilateral trade and encourage investment.

Key Points

Meeting Details: Commerce and Industry Minister met with South Korean counterpart in Vientiane, Laos, to address trade issues and economic cooperation.
Balanced Trade Focus: Discussions centered around achieving a more balanced trade relationship, upgrading the India-Korea Comprehensive Economic Partnership Agreement (CEPA), and promoting investment linked to job creation.
Review Meetings: Both nations are actively conducting review meetings to enhance the CEPA, which has been in effect since January 2010, with over 10 rounds of discussions completed to date.
Market Access Issues: India and South Korea are seeking improved market access for specific products currently listed under the agreement’s negative list, which does not allow for customs duty concessions.
Export Concerns: India is pushing for greater access to South Korea for products such as steel, rice, and shrimp, while raising concerns about the lack of purchases of Indian steel by Korean firms.
Trade Deficit Awareness: India has expressed concerns over the increasing trade deficit with South Korea, with exports falling to $6.41 billion in 2023-24 from $6.65 billion the previous year, while imports remained high at $21.13 billion.
Non-Tariff Barriers: Indian exporters face significant challenges due to non-tariff barriers in South Korea, including stringent regulations and certification requirements that hinder market entry for Indian goods.