India is pushing for expanded market access for key products such as steel, rice, and shrimp from South Korea in ongoing negotiations to upgrade the existing free trade agreement (FTA) between the two nations, officially known as the Comprehensive Economic Partnership Agreement (CEPA).
The CEPA, operational since January 2010, is undergoing the 10th round of upgrade talks aimed at enhancing economic collaboration between the two countries. During the negotiations, India has specifically highlighted concerns about Korean firms not procuring Indian steel, emphasizing the need for a fair and competitive environment.
“Korean firms in India also place orders from their local firms in Korea, so this is a double whammy for Indian companies. The Korean side has asked for an increase in price competitiveness here,” remarked an official involved in the negotiations.
India’s requests include greater market access for steel, with concerns raised about Korean firms sourcing steel locally and not from Indian producers. Additionally, issues related to rice have been brought to the forefront, particularly regarding the tariff rate quota of five lakh tonnes in Korea. India, categorized under “others,” is seeking either reclassification or an increase in its quota due to the existing import duty of 513 per cent on rice in South Korea.
Similarly, on shrimp imports, where there is currently a 5 per cent import duty, India is pushing for favorable conditions. South Korea, in return, is expressing interest in greater access to sectors such as auto components and chemicals.
The ninth round of CEPA upgradation negotiations took place in Seoul from November 3-4, 2022. Both countries hope that the ongoing discussions will play a pivotal role in reinforcing and deepening economic cooperation. The talks are integral to addressing India’s concerns about the growing trade deficit between the two nations.
India’s exports to South Korea amounted to USD 6.65 billion in 2022-23, while imports reached USD 21.22 billion during the same period. The negotiation process is expected to provide a platform for resolving trade imbalances and fostering stronger economic ties. The next steps in this crucial negotiation will determine the future trajectory of trade relations between India and South Korea.
