South Korea Aims to Conclude FTA Talks with India Ahead of Potential 2024 State Visit

India and South Korea are optimistic about finalizing negotiations to upgrade the Comprehensive Economic Partnership Agreement (CEPA) 2024 before a potential state visit by the Korean President, Ambassador Chang Jae-bok stated. He mentioned that at the last round of negotiations in late January, both sides showed a willingness to conclude the talks within the year, with each side presenting concessions in the hopes of reaching a compromise.
Ambassador Chang expressed hope that the negotiations would be concluded before the potential bilateral visit by the South Korean President, which is likely to occur after the elections in both India and Korea. The CEPA between India and South Korea came into effect in 2010, but the Indian government has expressed dissatisfaction with the agreement, with Commerce Minister Shri Piyush Goyal stating in July 2023 that the pact should be more balanced and equitable.

Bilateral trade between India and South Korea increased by nine per cent in 2022-23 to $27.88 billion, despite India experiencing a significant trade deficit. While India’s exports fell by 18 per cent to $6.65 billion, imports from South Korea rose by 21 per cent to $21.23 billion.

In the first nine months of 2023-24, total bilateral trade stood at $20.92 billion, with India’s exports declining by seven per cent year-on-year to $4.76 billion and imports from South Korea increasing by one per cent to $16.16 billion.

Ambassador Chang remarked on February 28 that while he hoped trade would continue to grow, it required effort from both sides. He noted that Free Trade Agreement negotiations were generally challenging due to domestic political considerations regarding industries that might gain or lose from such agreements.

Reports suggest that India is seeking greater access to the South Korean market for products such as steel, rice, and shrimp, while South Korea is interested in increased access to India for sectors like auto components and chemicals.

Ambassador Chang stated that discussions between the two countries’ foreign ministers are expected to cover topics such as defence, defence production and cooperation, economic security, science and technology, and people-to-people exchanges.