India and Korea will hold the next round of talks this week to review and upgrade the bilateral Comprehensive Economic Partnership Agreement (CEPA), a senior official said.
The talks are scheduled in Seoul from July 17-19 and it will be the 11th meeting on the review.
The review of CEPA – which was signed in 2009 and came into force in 2010 – was agreed to in 2016. Since then ten rounds of talks have been held but pace had picked up in recent months. Some Korean officials have been on record saying that talks may finally conclude in 2024.
Both sides have exchanged the list of ‘request’ where they are seeking further opening up of trade.
From the Korean side the demand has come in sectors like automobiles, textiles, chemicals and petrochemicals while India is seeking greater access to the steel, rice, shrimp and clothing market.
According to experts, Korea’s attempt is to increase the level of openness of the Indian market or atleast get it on par with India-Japan FTA. From South Korea’s perspective, the effectiveness of bilateral trade liberalisation has been questioned as key export sectors such as automobiles have been excluded from concessions.
Indian exporters have complained of the unwillingness of the Korean industry to buy items like steel from India despite the competitiveness. Apparel makers have complained of safety standards being kept so high as to make exports difficult.
The agreement covers trade in goods, investments, services, and bilateral cooperation in areas of common interest. Under the CEPA, Korea was to phase out/reduce tariffs on 90 percent of Indian exports, while India would phase out/eliminate 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 have stayed in $ 5-7 billion range during the period, imports have increased from $ 12.4 billion in 2011 to $ 21.1 billion in 2023-24.