India, South Korea to discuss strengthening the FTA
The Dollar Business Bureau
India and South Korea will have a discussion on Saturday to assess their free trade agreement (FTA) in order to strengthen it. In January 2010, the two countries had implemented the CEPA (Comprehensive Economic Partnership Agreement) and relaxed the trade regulations for one another.
The Commerce Minister Nirmala Sitharaman, while speaking at an event jointly organised by Korea Trade-Investment Promotion Agency (KOTRA) and FICCI, said the two nations should take every step for further strengthening the CEPA and will discuss several aspects of the agreement.
“We hope to do an intensive exercise so that it can be concluded in favour of both the countries. It will require quite a few assessments of the benefits derived from both the countries under the existing CEPA,” Sitharaman said.
Speaking at the event, Hyunghwan Joo, Minister for Trade, Industry and Energy of Korea said that both the countries should improve their institutional foundations of investments and trade particularly by upgrading the CEPA.
He mentioned that trade volumes between the two nations have significantly increased, with the implementation of the agreement.
However, the prevailing agreement suffers due to a low rate of utilisation as the rules of origin are complex and concessions level is low, he added.
The remarks of the Korean Minister holds significance as South Korea has sought a broadening of the FTA scope by including more products under the agreement such as machinery and some specific steel products. In 2015-16, India had a trade deficit of about $10 billion with South Korea.
The strengthening of the FTA merits reopening of the pact and fresh discussions related to duty-free access to new items. Under the free trade pact, duties on most of the items traded between the nations are either removed or reduced considerably.
The bilateral trade between India and South Korea stood at $16.59 billion in 2015-16.