India and South Korea will jointly review their Free Trade Agreement (FTA) on Saturday with an aim to further boost bilateral trade and investment ties.
The FTA, officially called the Comprehensive Economic Partnership Agreement (CEPA), had come into effect in 2010.
Commerce and Industry Minister Nirmala Sitharaman said, both the countries should further strengthen the CEPA. “We hope to do an intensive exercise so that it can be concluded in the favour of both the countries. It will require quite a few assessments of the benefits derived from both the countries under the existing CEPA,” she said.
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The FTA review will involve, among other things, fresh negotiations on elimination / reduction of duties on various products.
The Minister was speaking at a function organised jointly by Indian industry body FICCI and Korea Trade-Investment Promotion Agency.
South Korean Minister for Trade, Industry and Energy Hyunghwan Joo said, India and Korea should enhance their institutional foundations of trade and investments “most notably by upgrading the CEPA.”
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He said following the implementation of the pact, bilateral trade has increased.
However, he added that “our current CEPA suffers (because) of low utilisation rate due to complex rules of origin and low level of concessions.”
South Korea is seeking to expand the scope of FTA by including more products such as machinery and some steel products under the pact.
Indian steel makers want steel products to be excluded from the scope of FTA with Japan and Korea following a surge in cheaper steel imports hurting them. One of the reasons for the imported steel items being cheaper compared to the local products is the advantage they enjoy owing to the FTAs India have inked with these countries under which there are duty concessions to these items.
The Korean Minister said only 62 per cent of Korean exports to India are enjoying the benefits of CEPA with India vis-à-vis around 80 per cent of Korean exports to their other trade partner countries availing the advantages of a CEPA Korea has with those countries. “I hope to see more Koreans and Indian companies taking advantage of CEPA,” he noted.
Mr. Hyunghwan said he hoped India and Korea would work on streamlining the rules of origin norms.
He said that Indian companies should invest in Korea as they can get access to Chinese market with which Korea has an FTA.