The talks between India and Korea on the review of the Comprehensive Economic Partnership Agreement (CEPA) have made significant headway, with both sides exchanging the list of ‘requests’ where they want further opening up of trade.
From the Korean side the demand has come in regard to sectors like automobiles, textiles, chemicals and petrochemicals while India is seeking greater access to the Korean markets for steel, rice, shrimp and clothing.
“The requests made by Korea are being discussed with the ministries of steel, textiles, chemicals and petrochemicals and heavy industries. Based on the discussions, offers of the request will be finalised,” senior official said.
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The revision of the CEPA has been painfully slow as both sides are approaching the matter from different standpoints. Korea wants to expand the agreement while India is seeking review to address the expanding trade deficit with Korea. 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. The last round of discussions on the subject were held earlier this year. Some Korean officials have been on record saying that talks may finally conclude in 2024 but dates for the next round of talks is yet to be finalised. Officials say that the next dates of next round of talks will be finalised when both sides are ready with their offers.
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.
From: financialexpress
Financial News
