India today comes with a lot of strength on the negotiating table, Commerce and Industry Minister Piyush Goyal said on Monday as he pitched for a new trade pact with South Korea that is “more contemporary.”
Noting that the Comprehensive Economic Partnership Agreement (CEPA), in force since 2010, has not worked for India, Goyal said, “I have suggested to my counterpart that we may even consider rewriting a new chapter, a completely new FTA, because it should be more contemporary.
A lot of water has flown down the Ganga in the last 16 years, the world has changed, the global order has changed.”
“India today comes with a lot of strength on the negotiating table and let us see, we will now let the chief negotiators come up with some options for us,” he told reporters on the sidelines of India-Korea Business Forum.
CEPA between India and South Korea
CEPA between India and South Korea was signed in 2009 and came into force in 2010. Since the outcome of the agreement was in Korea’s favour, the review of the agreement was agreed to in 2016. Since then 11 rounds of talks have been held. The officials said this time the talks would be different.
“When External Affairs Minister S Jaishankar called on Korean President Lee Jae Myung, he explained to him that the mood in India is different between 2010 and now, especially in the last 2-3 years we have concluded several FTAs. The ability of India to do FTAs is much higher and our ambition will be suitably reflective of that,” Secretary (East) in MEA P Kumaran said.
Scope of a revised FTA
The revised FTA will have to have a wider scope than mere tariff negotiations, India’s ambassador to South Korea Gourangalal Das said. Since the CEPA, India’s exports to Korea have gone up from $3.7 billion in 2010-11 to $5.8 billion in 2024-25.
During this period imports from Korea increased from $10.4 billion in 2010-11 to $21 billion in 2024-25.
The upgrade of CEPA would address non-tariff barriers, ease rules of origin, expand market access for a more balanced economic partnership, Goyal said.
Indian team in US to secure preferential market access: Goyal
India has almost finalised the first tranche of the Bilateral Trade Agreement (BTA) with the US and is working out a mechanism by which it can get preferential access in the American market as compared to competitors, Commerce and Industry minister Piyush Goyal said on Monday.
A team of India officials led by the chief negotiator from the Indian side , Additional Secretary in the department of Commerce Darpan Jain would be in Washington for three days of talks starting April 20. “The team will be discussing these aspects (maintaining the comparative tariff advantage) while they are in Washington,” Goyal said on the sidelines of India -Korea Business Forum Meeting.
Purpose of visit
The purpose of the visit by Indian officials is to work towards finalising the legal agreement based on the joint statement of February 7. The joint statement had brought reciprocal tariffs on India to 18% from 25% and scrapped 25% penal tariffs for buying Russian oil. The reciprocal tariffs that India negotiated were lower than what its competitors got in their trade deal with the US.
However, after the joint statement and before the 18% tariffs could be notified, on February 20 the US Supreme Court invalidated the reciprocal tariffs announced on April 2 last year. After the Supreme Court order the US government by executive order imposed 10% duties on all imports under section 122 of the Trade Act.
Since the joint statement there have been virtual discussions with the US and no physical meetings. “Every country is now calibrating its earlier deal with the US. So we are also moving in that direction. Looking at what will be a legal agreement and the trade-offs. The trade-off from the other side is something that we like to hear from them,” an official had said earlier.