India, South Korea mull ways to balance trade – Industry News

India and south Korea on Saturday discussed addressing the issue of non-tariff barriers being faced by Indian exporters in the Korean market and other related matters to achieve more balanced trade between the two.

In the meeting between commerce and industry minister Piyush Goyal and minister of trade, industry and energy of Korea Inkyo Cheong, both sides also held discussions on upgrading the existing Comprehensive Economic Partnership Agreement (CEPA). The negotiations on expanding the pact are in progress.

The meeting was held at Vientiane in Laos on the sidelines of the ASEAN-India Economic Ministers’ meeting and the East Asia Summit Economic Ministers’ Meeting.

CEPA between India and Korea was signed in 2009 and came into force in 2010. Since the outcome of the agreement was in Korea’s favor, the review of the agreement was agreed to in 2016. Since then, 11 rounds of talks have been held. Some Korean officials have been on record, saying that talks may finally conclude in 2024.

Since the CEPA, India’s exports to Korea have gone up from $3.7 billion in 2010-11 to $6.4 billion in 2023-24.

During this period, imports from Korea increased from $10.4 billion in 2010-11 to $21.1 billion in 2023-24. The trade deficit during the period has gone up to $114.7 billion in FY24 from $7.7 billion in 2010-11.

During the different rounds of negotiations for the review, the two 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. Indian exporters have also complained of facing various non-tariff barriers in South Korea in the form, including stringent standards, regulations, and certification requirements.

According to experts, Korea’s attempt is to increase the level of openness of the Indian market or at least get it on par with India-Japan FTA. From South Korea’s perspective, the effectiveness of bilateral trade liberalization has been questioned as key export sectors such as automobiles have been excluded from concessions.

The Department of Commerce had earlier engaged with different ministries, including heavy industries, steel, and chemicals, to prepare the offer list.

Apart from the Korean minister, Goyal also had bilateral meeting with industry and commerce minister of Laos Malaithong Kommasith, investment and foreign economic relations minister of Myanmar Kan Zaw.

With Myanmar potential cooperation in areas like lentils, diesel, gasoline, electric vehicles and ways to promote bilateral trade, including through Rupee-Kyat currency mechanism between the two nations, was discussed.