India, Korea discuss improvement of existing trade agreement; to encourage investment
India and Korea on Saturday held talks to develop a free trade agreement, balance bilateral trade and promote investment between the two countries.
These issues were discussed at a meeting between Trade and Industry Minister Piyush Goyal and his Korean counterpart Inkyo Cheong in Vientiane, Laos.
“Discussions were held on achieving more balanced trade, developing the India-Korea Comprehensive Economic Partnership Agreement (CEPA), promoting investment linked to job creation and addressing non-tariff barriers to further strengthen our economic ties,” Goyal said in a social media statement. media platform X.
The two countries held review meetings to develop CEPA, which entered into force in January 2010. So far, more than 10 review meetings have been held.
The two countries have sought greater market access for certain products under the negative list of the agreement. No real estate tax concessions are granted for properties under this list.
The Department of Commerce has previously partnered with various ministries, including heavy industry, steel, and chemicals, to prepare the list of offers.
India has sought greater market access for certain products such as steel, rice, and shrimp from South Korea to boost exports of these goods. India has raised concerns about Korean companies not buying Indian steel.
The review work takes on importance as both sides shared the hope that the negotiations to develop CEPA will play an important role in strengthening and deepening the economic cooperation between the two countries.
In general, such review or development work includes issues of implementation, rules of origin, the process of verification and release of goods, customs procedures, further liberalization of trade in goods, and sharing and exchange of trade data.
India has also raised concerns about the growing trade deficit between the two countries. India’s exports to Korea declined to USD 6.41 billion in 2023-24 from USD 6.65 billion in 2022-23 and USD 8 billion in 2021-22.
Imports stood at USD 21.13 billion in the last fiscal compared to USD 21.22 billion in 2022-23 and USD 17.5 billion in 2021-22.
According to the think tank Global Trade Research Initiative (GTRI), India’s trade deficit with South Korea has increased at a much higher rate compared to its trade deficit with the rest of the world.
It also stated that Indian exporters face various non-tariff barriers in South Korea, including strict standards, regulations, and certification requirements, and these barriers make it difficult for Indian goods to enter the South Korean market.
Goyal also held a meeting with Kan Zaw, Minister of Investment and International Economic Relations, on the sidelines of the 12th Meeting of Economic Ministers of the East Asia Summit.
“Possible cooperation in areas such as lentils, diesel, fuel, electric vehicles, etc. and ways to improve bilateral trade, including the Rupee-Kyat currency mechanism, between our nations were discussed,” he said.
