India-South Korea CEPA to begin in May or June 2024

India has been seeking greater market access for some of its commodities like rice, steel, and shrimp, and also in sectors like healthcare and information technology (IT) in a bid to boost exports of Indian products in the Southeast Asian country, the first person mentioned above said requesting anonymity. “Currently, the trade balance is heavily in favour of the Republic of Korea (South Korea),” the person added.

South Korea and India signed the CEPA in Seoul in 2009 to increase economic exchange and facilitate trade between the countries.

The agreement, negotiated over 12 rounds and for over three years, came into effect from 2010. However, India’s imports from South Korea have eclipsed exports to the country.

 “The government has raised concerns about the growing trade deficit between India and the Republic of Korea,” the first person mentioned above said. “The upcoming negotiations will address some of the issues,” the person added.

The analysis of India’s three key Free Trade Agreements (FTAs) with ASEAN, South Korea, and Japan, signed in 2010-2011, reveals India’s merchandise trade deficit with these partners increased significantly more than its global trade deficit, and India’s exports to these FTA partners have increased at a lower rate than its imports, economic think tank Global Trade Research Initiative (GTRI) said in a recent report.

“Many Indian firms choose not to use the FTA route when (Korean) duties are low, as FTA-related compliance costs do not justify the tariff benefits,” the report said.