CEPA agreement a core basis for economic cooperation between India and Korea: Envoy
NEW DELHI: Ambassador of the Republic of Korea Chang Jae-bok has said that the Comprehensive Economic Partnership Agreement (CEPA) between India and South Korea se es as a core basis for economic cooperation between the two countries.
Ambassador hoped that both the countries would soon close the negotiations on widening the scope of the CEPA with a high level of openness.
“The CEPA agreement serves as a core basis for economic cooperation between the two countries. I believe negotiations for increasing the level of openness should be finalized soon,” said the Ambassador while talking to the media on the inauguration of the5-day Korea Fair in India 2022 (June 1-5) organised by Korea Trade-Investment Promotion Agency (KOTRA) on Wednesday in New Delhi.
Ambassador was referring to the trade ministerial meeting held between Commerce & Industry Minister Piyush Goyal and his Korean counterpart Yeo Han-koo in New Delhi on January 11 this year. In the meeting both sides stressed the need for fast-tracking the up-gradation process of the CEPA.
While replying to a question related to the future of India-South Korea trade relations, the Korean Ambassador to India said that India and South Korea, in the beginning of this year (January 2022) set a bilateral trade target of $50 billion to be achieved before 2030.
“In a recent ministerial interaction, key representatives have agreed to impart fresh momentum to discussions on the Comprehensive Economic Cooperation Agreement (CEPA) up-gradation negotiations and also promote extensive B2B interactions on trade and investment between industry leaders of the two countries,” he added.
Negotiated over twelve rounds for over more than three years, CEPA between India and South Korea was signed on 7th August, 2009 in Seoul, and it came into effect on 1st January 2010.
It commits both countries to lower or eliminate import tariffs on a wide range of goods, over the years and expand opportunities for investments and exchanging services. ROK was expected to phase out or reduce tariffs on 90 percent of Indian goods over the next decade, while India on 85 percent of Korean goods.
When asked about the current status of Korean investment in India, Ambassador said that an annual investment of 1 billion dollars from the Korean side had been continued so far, mainly large-scale investments made by large corporations and their suppliers in the field of automobiles, electronics, and steel.
“Further investments in chemicals and steel are currently being considered and small and medium-sized enterprises are also increasingly knocking the Indian market,” he added.
Ambassador said automobile, electronics, Medical Devices and Diagnostics, EV infra and battery, Logistics and warehousing are the key segments Korean companies are looking at for the Indian market. Further investments in chemicals and steel are also being considered and small and medium sized enterprises are also increasingly knocking the Indian market.
While replying a question related to how does Korea see India as a market for Korea, Korea’s long term plans for the Indian market, Ambassador Chang Jae-bok said, ” India-South Korea relations have made great strides in recent years. Both countries have set a target to achieve bilateral trade worth US$50 billion by 2030. Korea’s main exports to India have been automobile parts, telecommunication equipment, petroleum refined products, base lubricating oils, nuclear reactors, mechanical appliances, electrical machinery & parts and iron & steel products.”
As regards India’s trade deficit with Korea, Ambassador said it was inadequate to evaluate the two countries’ trade relations by looking only at the trade balance.
“Each side has a certain difference in terms of industrial competitiveness and another reason is that most Korean companies are importing intermediate goods from Korea to carry out their investments. I think that the two countries will need to be competitive to have a more balanced relationship,” he added.
According to data from Korea’s Ministry of Trade, Industry, and Energy (MOTIE), bilateral trade between the two countries reached $23.7 billion in 2021, surpassing $21.5 billion in 2018. This was the highest-ever trade volume between the two countries, representing a 40% increase over the previous year’s total of $16.9 billion.
