CEPA: India wants South Korea to drop tariffs on some items

Contact Counsellor

Last Updated03/07/2024

India wants South Korea to eliminate tariffs on a number of items, such as varieties of meat, milk, fruits, fish, stones, yarn and petroleum products, which were exempted or protected against steep cuts in the India-Korea Comprehensive Economic Partnership Agreement (CEPA) signed about a decade-and-a-half ago.

The two countries are preparing to discuss request lists for tariff cuts in the on-going negotiations to upgrade the CEPA, with narrowing of trade deficit with South Korea high on India’s agenda.
“Stakeholders in the Indian industry have been provided the draft request list and asked to suggest more items on which tariff cuts can be sought and even propose deletions if needed. The next round of India-Korea CEPA upgrade meeting.
The CEPA, signed in August 2009 and implemented in January 2010,
- covers trade in goods, investments, services, and bilateral cooperation in areas of common interest.
- While India offered tariff elimination or concession on 83.8% tariff lines imported from South Korea, the latter offered tariff elimination or concession on 93.2% tariff lines.

Bringing down the trade deficit with South Korea is one of the top matters for discussions featuring in India’s negotiating agenda.
In 2023-24, India’s imports from South Korea was $21.13 billion while exports stood at $6.41 billion.
The average exports from India to South Korea before the CEPA (2007-09) were valued at $3.4 billion, while the average imports stood at $7.3 billion, leading to an average trade deficit of $4 billion, per an analysis by research body Global Trade and Research Initiative (GTRI).
Post-CEPA (2022-24), the average exports increased to $ 7.1 billion, and imports surged to $19.9 billion, resulting in a much larger average trade deficit of $12.8 billion.
“This indicates an increase in the trade deficit by $ 7.2 billion from the pre-CEPA period to the post-CEPA period, marking a 220% increase,” GTRI pointed out in its report.