Days after having inked a civil nuclear agreement with South Korea, India will reopen the Comprehensive Economic Partnership Agreement (CEPA) to make it more contemporary and further strengthen trade ties with the East Asian tiger.
The first round of talks on “upgrading” the CEPA will begin next week, with an Indian team due to visit Seoul. Since 2009, when the India-South Korea CEPA was sealed, both countries have shed their cautiousness and offered better terms to other nations. India has offered lower tariffs to other countries with which it has made similar agreements, while South Korea too has been more liberal in offering access to other countries.
“We finalised the India-South Korea CEPA in 2009. Since then, the ground realities have changed. They have made offers to other countries that go way beyond what was offered to us. This will help increase trade much faster,” said government sources.
Trade with South Korea stood at $7.1 billion in 2006. The CEPA propelled it to $17.5 billion in 2010 — an increase of 46 per cent over the previous year, with growth rates of exports being the same for both countries. The expectation from bilateral trade this year is $21 billion — very much on course to touch the target of $30 billion set for 2014. “Thanks to the CEPA, exports by both countries have risen. We are beginning to see Indian IT companies getting a foothold in South Korea because of CEPA,” said the sources.
Civil nuclear agreement
Even as the government reopens the CEPA, it is keeping its eyes fixed firmly on the civil nuclear agreement signed during President Pratibha Patil's recent visit to Seoul. The text of the civil nuclear agreement was frozen at next February and offers India another option for setting up civil nuclear plants besides the three big boys of this sector — the U.S.-Japan, France and Russia. A high-level visit from Seoul later this year will help bring more depth to the agreement, said the sources.
“This agreement adds another dimension to the possibilities for India to access civil nuclear technology from another country,” said the sources. South Korea stunned the civil nuclear community by pipping the French giant Areva in a limited tender to bag $20 billion worth of orders from the United Arab Emirates for building four nuclear plants. Korea Electric Power Corporation has already signed a Memorandum of Understanding with the Nuclear Power Corporation of India Limited.
The intention is to forge a healthy all-round relationship with this crucial country on the periphery of the Association of South East Asian Nations (ASEAN). Besides agreeing on an annual meeting between Finance Ministers that would resolve trade-related irritants at the political level, India has also signed a defence cooperation agreement and a social security agreement.
Sources said that the accent on a comprehensive partnership in all fields had helped reverse South Korea's scepticism over India not being a member of the Nuclear Non-Proliferation Treaty (NPT). In 2007, the South Korean chief negotiator in the six-party talks with North Korea on the nuclear issue had said the U.S.-India civil nuclear agreement could lead to North Korea asking, “why not us?”.