CEPA overview: New Delhi needs Korea to get rid of tariffs on sure meals, yarn, petroleum merchandise

India needs South Korea to get rid of tariffs on quite a lot of objects, corresponding to styles of meat, milk, fruits, fish, stones, yarn and petroleum merchandise, which had been exempted or protected in opposition to steep cuts within the India-Korea Complete Financial Partnership Settlement (CEPA) signed a few decade and a half in the past, sources mentioned.

The 2 nations are getting ready to debate request lists for tariff cuts later this month within the on-going negotiations to improve the CEPA, with narrowing of commerce deficit with South Korea excessive on India’s agenda.

“Stakeholders within the Indian business have been supplied the draft request record and requested to counsel extra objects on which tariff cuts might be sought and even suggest deletions if wanted,” a supply monitoring the matter informed businessline. The following spherical of India-Korea CEPA improve assembly is probably going on July 17-19, sources mentioned.

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The India-South Korea CEPA, signed in August 2009 and applied in January 2010, covers commerce in items, investments, companies, and bilateral cooperation in areas of frequent curiosity.  Whereas India provided tariff elimination or concession on 83.8 per cent tariff traces imported from South Korea, the latter provided tariff elimination or concession on 93.2 per cent tariff traces. 

“The Division of Commerce, which leads the negotiations, has additionally requested the business to share the SPS and TBT (requirements and technical obstacles) associated points being confronted whereas exporting to South Korea,” the supply mentioned. 

Commerce deficit

Bringing down the commerce deficit with South Korea is likely one of the prime issues for discussions that includes in India’s negotiating agenda. In 2023-24, India’s imports from South Korea was at $21.13 billion whereas its exports totalled a mere $6.41 billion.

The typical exports from India to South Korea earlier than the CEPA (2007-09) had been valued at $3.4 billion, whereas the typical imports stood at $7.3 billion, resulting in a mean commerce deficit of $4 billion, per an evaluation by analysis physique International Commerce and Analysis Initiative (GTRI). Submit-CEPA (2022-24), the typical exports elevated to $ 7.1 billion, and imports surged to $19.9 billion, leading to a a lot bigger common commerce deficit of $12.8 billion, it mentioned. “This means a rise within the commerce deficit by $ 7.2 billion from the pre-CEPA interval to the post-CEPA interval, marking a 220 per cent improve,” the GTRI report identified.

Indian exporters face varied non-tariff obstacles in South Korea, together with stringent requirements, rules, and certification necessities which make it troublesome for Indian items to penetrate the South Korean market, the report added.