India Plans Enhanced Trade Terms with South Korea in FTA Upgrade

India is currently engaged in an inter-ministerial consultation process aimed at preparing an “offer list” as part of the planned revamp of the India-South Korea free trade agreement (FTA), according to government sources. The consultations, which began on Monday, June 24, involve multiple ministries including steel, heavy industries, chemicals, and finance. These discussions are pivotal in formulating a comprehensive offer list to be exchanged between India and South Korea during the upgrade of their existing FTA, known as the Comprehensive Economic Cooperation Agreement (CEPA).

Sources close to the matter indicate that India’s primary objective in this upgrade is to secure greater market access for specific products such as steel, rice, and shrimp from South Korea. The aim is to bolster India’s exports of these goods to the Korean market. Concurrently, Indian officials have raised concerns regarding South Korea’s limited imports of steel from India, signaling a desire for more balanced trade relations in this sector.

The CEPA upgrade discussions are expected to encompass a wide range of trade-related issues, including implementation challenges, rules of origin, verification procedures, customs regulations, and the further liberalization of trade in goods. Additionally, there will be a focus on enhancing the sharing and exchange of trade data between the two nations to facilitate smoother trade operations.

The inter-ministerial consultations underscore India’s proactive stance in leveraging trade agreements to enhance its economic ties globally, particularly with strategic partners like South Korea. By seeking to expand market access for key export items, India aims not only to diversify its export base but also to address bilateral trade imbalances in sectors of mutual interest.

The India-South Korea FTA, originally signed in 2009, has been a cornerstone of economic relations between the two countries, facilitating significant trade flows and investment. The upcoming upgrade of the CEPA is viewed as a crucial step towards modernizing and deepening this economic partnership in line with contemporary trade dynamics.

The inclusion of sectors such as steel, heavy industries, chemicals, and finance in the consultation process reflects India’s intent to comprehensively address the needs and priorities of various industries within the framework of the FTA. This approach is intended to ensure that the revised agreement not only facilitates smoother trade but also promotes sustainable growth and development in both economies.

Government sources further indicate that the negotiations will also cover issues related to the verification process and the release of consignments, which are critical for streamlining trade procedures and reducing administrative bottlenecks. By addressing these operational aspects, India aims to create a more conducive environment for businesses to engage in cross-border trade with South Korea.

The consultation process is expected to be followed by rounds of negotiations aimed at finalizing the terms of the upgraded CEPA. Both India and South Korea are anticipated to engage in constructive dialogue to resolve outstanding issues and pave the way for the implementation of the revised agreement in the near future.

India’s ongoing efforts to revamp the India-South Korea FTA underscore its commitment to fostering robust economic partnerships and enhancing trade relations with key global allies. The upcoming upgrade of the CEPA holds significant promise for unlocking new opportunities in trade and investment between India and South Korea, while also addressing mutual concerns and reinforcing bilateral cooperation across various sectors.