South Korea, India to enhance free trade deal
Tax News | 22 June 2016
South Korea, India to enhance free trade deal
by Mary Swire
South Korea and India have agreed to enter into talks aimed at re-negotiating the terms of their existing bilateral Comprehensive Economic Partnership Agreement (CEPA), particularly to improve the list of traded goods subject to reduced tariffs.
In a statement following the second meeting of the Joint Ministerial Committee held to review the CEPA in New Delhi on June 18, the South Korean Ministry of Trade, Industry, and Energy confirmed that the percentage of tariffs eliminated or reduced in the current agreement (which entered into force on January 1, 2010) is less than in the free trade agreements subsequently concluded by South Korea with other jurisdictions.
The Ministry confirmed that, presently, only about 85 percent of South Korean exports to India (both in terms of the number of items and their value) are tariff free or pay a reduced rate of import duty. With regard to Indian goods exported to South Korea, only 93 percent by number of items (or 90 percent by value) are subject to tariff elimination or reduction.
The Indian Government has become concerned at the increasing trade deficit being seen recently by India in its trade with South Korea. In reply, during the meeting, the South Korean Minister of Trade, Industry, and Energy, Joo Hyunghwan, stressed that his country is open to increasing trade with India and to allowing Indian exporters greater market access on a reciprocal basis.
India’s Commerce Minister Nirmala Sitharaman looked for greater market access in South Korea for the Indian agricultural, marine, information technology and service sectors. On the other hand, South Korean exporters might expect to see improved terms for its steel, electrical and electronic, and automotive parts industries, within a CEPA renegotiation.
