India and South Korea to Renew CEPA Negotiations in May-June

India and South Korea to Renew CEPA Negotiations in May-June/Mint

VoM News Desk | April 24, 2024 | 07:20 PM IST | South Korea, World | Follow on Google News

India and South Korea to Renew CEPA Negotiations in May-June

India and South Korea to Renew CEPA Negotiations in May-June

Highlights:

1. India and South Korea plan to upgrade the CEPA in May-June after the 10th round of negotiations earlier this year.
2. India aims for greater market access for commodities like rice, steel, and shrimp, as well as in healthcare and IT sectors.
3. The current trade balance heavily favors South Korea, prompting India to seek revisions in the agreement.
4. Despite the CEPA signed in 2009, India’s imports from South Korea have surpassed exports, leading to concerns about the growing trade deficit.
5. India’s FTAs with ASEAN, South Korea, and Japan have seen significant trade imbalances, prompting calls for review and renegotiation.

India and South Korea are set to embark on a fresh round of negotiations to enhance the Comprehensive Economic Partnership Agreement (CEPA) in May-June, following the conclusion of earlier talks earlier this year. The discussions aim to address India’s concerns regarding trade imbalances and seek greater market access for Indian products, particularly in sectors like healthcare and information technology (IT). Currently, the trade balance heavily favors South Korea, prompting India to push for revisions in the agreement to boost its exports and address the growing deficit.

Despite the CEPA being signed in 2009 to facilitate trade and economic exchange between the two countries, India has struggled to maintain a favorable trade balance with South Korea. In 2023, India’s exports to South Korea declined by 16.61% annually, while imports from the Southeast Asian country increased by 3.19%. The upcoming negotiations will focus on rectifying this imbalance and addressing India’s concerns about the widening trade gap.

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India’s trade relations with key Asian partners, including ASEAN, Japan, and South Korea, have been marked by significant trade deficits. Recent data indicates that India’s exports to these regions have not kept pace with imports, leading to calls for a review of existing free trade agreements (FTAs) to minimize trade imbalances. As India seeks to bolster its economic ties with these partners, negotiations to upgrade and renegotiate existing agreements are crucial to ensure mutually beneficial trade relations.

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