India and South Korea are hopeful of concluding negotiations to 'upgrade' the Comprehensive Economic Partnership Agreement (CEPA) in 2024 before a possible state visit of the Korean President, Ambassador Chang Jae-bok has said.
"At the last round of negotiations in end of January, we found some willingness to conclude the negotiations within this year. So each side will present concessions to the other side and then hopefully we will reach a compromise," Chang Jae-bok told reporters on February 28 in New Delhi.
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"Hopefully, before the possible bilateral visit by our President – probably after the elections in India and in Korea – we hope to conclude the negotiations," the ambassador added.
National elections in India will likely be held in April-May. Meanwhile, elections in South Korea are scheduled to be held on April 10.
The CEPA between India and South Korea became operational in 2010. However, the Indian government has voiced its dissatisfaction with the agreement, with Commerce Minister Piyush Goyal saying in July 2023 saying the pact should be more balanced and equitable.
India's bilateral trade with South Korea grew nine percent in 2022-23 to $27.88 billion, although India had a significant trade deficit. While India's exports contracted by 18 percent to $6.65 billion, imports from South Korea jumped 21 percent to $21.23 billion.
In the first nine months of 2023-24, the total bilateral trade stood at $20.92 billion, with India's exports down seven percent year-on-year at $4.76 billion and imports from South Korea up one percent at $16.16 billion.
On February 28, the South Korean Ambassador said that while he hoped trade would continue to increase, it was up to both sides to "work harder".
"Free Trade Agreement negotiations are in general very, very difficult to reach agreement because in each country there are some industries. With the conclusion of the FTA, some parts of industries will have a loss and some part of the economy will have some gains. So these are political negotiations domestically. It's not easy," the ambassador said, adding that he was not in a position to provide any details as the negotiations are still underway.
According to reports, India wants greater access to the South Korean market for certain foods such as steel, rice, and shrimp. At the same time, South Korea is said to want greater access to India in sectors such as auto components and chemicals.
Chang's briefing comes ahead of the visit of External Affairs Minister S Jaishankar to South Korea on March 5-6, where he will co-chair the 10th India-Republic of Korea Joint Commission Meeting (JCM) with his counterpart Cho Tae-yul.
"The JCM is expected to comprehensively review the entire gamut of bilateral cooperation and explore avenues for further strengthening it. It will also provide an opportunity for the two sides to exchange views on regional and global issues of mutual interest," according to a statement by India's external affairs ministry.
According to Ambassador Chang, discussions between the two foreign ministers are expected on issues such as defence, defence production and co-operation, economic security, science and technology, and people-to-people exchanges.
"We are proud to support Korean SMEs and start-ups and actively encourage their investments in India," Chang said. He added that Korean firm Simmtech's signing of a Memorandum of Understanding at the 10th Vibrant Gujarat Global Summit in January committing an investment of Rs 1,250 crore for printed circuit board (PCB) manufacturing could potentially "open doors for other Korean companies" in the Indian semi-conductor space.
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