India and South Korea are discussing ways to upgrade the existing free trade agreement with a view to boost trade and investments, a government official said today.
India and South Korea have implemented the trade pact in January 2010, which is officially known as Comprehensive Economic Partnership Agreement (CEPA).
Commerce and Industry Minister Suresh Prabhu was in Seoul last week to participate in the ministerial review of the India—Korea CEPA with his Korean counterpart Hyun Chong Kim.
“Both the sides want to upgrade the existing agreement. We have exchanged request lists which are under discussions to widen the scope of the pact. What needs to be tweaked in the current pact, we are looking at that,” the official said.
Review of the CEPA assumes significance as domestic industry has raised certain concerns over the utilisation of the agreement and sudden surge in gold imports from Korea.
Upgradation or widening of any free trade agreement means better utilisation of the existing pact and inclusion or elimination of more number of goods.
The review is also important as India had a trade deficit of about USD 8.5 billion in 2016-17. Under the widening the scope of the pact, South Korea wants addition of more products such as machinery and certain kinds of steel products.
Both the countries are also looking at increasing trade in services sector besides enhancing cooperation in renewable energy such as solar power.
The bilateral trade in 2016-17 increased to USD 16.82 billion from USD 16.57 billion in the previous fiscal.
Meanwhile a commerce ministry statement said that the ministers of both the countries affirmed that the negotiations for upgrading CEPA should be concluded within 2018.
“The ministers agreed on the importance of cooperation in the fields of standardisation and conformity assessment and developing mutual recognition agreements,” it said.
Further, both the sides agreed to set up a joint future strategy group to identify areas of high-end technological cooperation as a way to realise the vision of co-leadership in the era of fourth industrial revolution.
“The ministers agreed to continue discussions at working level about the detailed mandate of the strategy group with the aim to launch the group, preferably within 2017,” it said.
To enhance investments, it said “both the sides agreed to consider favourably the requests made in the joint committee meeting with regard to the investment cooperation”.
Prabhu also attended the Asia-Europe (ASEM) Economic Ministers meeting at Seoul.
In the meeting, the official said it was discussed to engage the think tank of ASEM to carry out a study on ways to increase ties in services sector and non-trade barriers.