India – Korea Trade Talks

On January 11, 2022, India and Korea held a bilateral trade talk. The talks focused on non – tariff barriers, market access issues, trade deficit faced by the Indian exporters. The countries also discussed investment related issues.

Background

The India – Korea bilateral trade was 20 billion USD in 2018. However, it started decreasing after that. And it was largely hit by the pandemic. The recent talks mainly discussed on this issue.

About the Talks

The talks aimed to make the relations “Equitable and Balanced and mutual advantage“. India raised the issues faced by the Indian exporters in Korea. This included difficulties faced while exporting products such as engineering, steel and agri products. The difficulties are around the stringent regulatory rules of Korea. The other Indian products facing market access issue in Korea are meat, pomegranate, grapes, eggplants and okra.

India has sought investments in sectors such as e – vehicles, semiconductors and technical textiles.

CEPA in the talks

The countries reviewed CEPA upgradation. CEPA is Comprehensive Economic Partnership Agreement. CEPA is a Free Trade Agreement. The agreement provided better access for the Indian service industries. This included engineering, IT, finance, engineering and legal field. With the agreement, Korean manufacturers were provided huge tariff concessions to 1%.

Trade Agreements between the countries

In 2010, India and Korea signed Economic Cooperation Agreement. This increased the trade and investment in both the countries.

Trade Relations

In 1962, the countries established the trade relations. In 1973, it was upgraded to ambassador – level relations. Then Korea became one of the major focus of India’s “Act East Policy”.

Trade Deficit

India faces trade deficit against Korea. That is the Indian exports to Korea is less than the Indian imports from the country. In 2008 – 09, the trade deficit was 5 billion USD. This increased to 8 billion USD in 2020-21.

Target set

In 2018, the countries had set a target of 50 billion USD of trade by 2030. During the talks they assured to work mutually to achieve the target.

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