New Delhi: India raised “serious concerns” over growing trade deficit with South Korea at a bilateral meeting this week in Seoul, and the two partners agreed to address tariff and non-tariff barriers during the two-day negotiations, a commerce ministry statement said on Friday.
India is currently renegotiating to upgrade the Comprehensive Economic Partnership Agreement (CEPA) with Republic of Korea (RoK), which was operationalised on January 1, 2010. The upgradation is necessary as the agreement in the current form was ill negotiated by the erstwhile UPA government and left several aspects that could have favoured India, one official aware of the development said requesting anonymity.
India’s mercantile exports to South Korea jumped 21.8% on annualised basis at around $6.1 billion in the first nine months of current calendar year, but imports also surged to $15.67 billion, registering over 28.4% growth in the same period. That left huge trade deficit of $9.57 billion in favour of Seoul, he said citing official data.
“India raised serious concerns on the growing trade deficit between the two countries and discussed market access issues,” the commerce ministry’s statement said.
According to a Ministry of External Affairs’ (MEA) note of January 2020, trade and economic relations gathered momentum following the implementation of CEPA in 2010. “The bilateral trade in 2018 was USD 21.494 billion and USD 20.7 billion in 2019. In 2018, exports from India accounted USD 5.884 billion, registering a growth of 18.8% and exports from ROK accounted for USD 15.610 billion registering a growth of 3.6%. In 2019, exports from India accounted for USD 5.6 billion and exports from ROK accounted for USD 15.1 [billion],” it said.
According to official data, even during the Covid period the mercantile trade deficit was very high. India exported goods worth $4.49 billion in 2020 to ROK, compared to $12.15 billion imports. In 2021, India’s goods exports to ROK was $7.09 billion compared to imports worth $17.08 billion from the country.
Both sides have agreed to “deepen relationship” in services sector, the commerce ministry said in the statement issued on Friday after concluding the 9th round of India-Republic of Korea (ROK) Comprehensive Economic Partnership Agreement (CEPA) up-gradation negotiation that took place from November 3-4, 2022.
“The two sides underlined the need to have negotiations, which are based on win-win approach, are forward looking and outcome oriented. Both sides shared the hope that the CEPA upgradation negotiations would play an important role in strengthening and deepening economic cooperation between both countries,” it said.
Sub groups on trade in goods, services, rules of origin, investment, and other issues held in-depth discussions, it added.
They also shared a common view that both sides should make utmost efforts to expedite negotiations in order to reach a mutually beneficial and satisfactory outcome during 2023, while taking note of the importance of the upcoming 50th anniversary of diplomatic relations between the two countries, it said.
The chief negotiators also shared the view that both sides should promote conducive trade environment to enable both sides to fully utilise benefits under the CEPA.
It was agreed that the 10th round of CEPA upgradation negotiations will be hosted by India in early 2023.
The Indian delegation was led by chief negotiator Anant Swarup, joint secretary in the department of commerce. The Korean side was led by Yang Ghi-Wuk, director general in the ministry of trade, industry and energy (MOTIE), Republic of Korea.