India to hold talks on upgrading bilateral trade pact with South Korea this week

India to hold talks on upgrading bilateral trade pact with South Korea this week

News

India and South Korea are negotiating to upgrade the Comprehensive Economic Partnership Agreement (CEPA)

Important facts

1. India plans to seek inclusion in the list of countries allowed to participate in the English Program in Korea (EPIK). Earlier the request was not accepted in Early harvest programme signed between India and South Korea in 2018.
2. India also plans to advocate for domestic certificate recognition in areas such as accountancy, healthcare, nursing and architecture to facilitate movement of professionals

About CEPA between India and South Korea

1. To promote economic cooperation between India and South Korea, a Comprehensive Economic Partnership Agreement (CEPA) has been in place since 2010.
2. It envisages tariff elimination/reduction in about 80% of goods such as textiles, leather goods and, pharmaceuticals, opening up of sectors such as tourism and healthcare and freer movement of persons.

About Early harvest Programme (EHP):

1. In the EHP, South Korea decided to eliminate tariffs on 17 Indian products. India also brought down duties on 11 items.
2. Further, EHP increased the visa duration for ICT employees to three years from one year.

Note: Early harvest scheme helps the two trading countries to identify certain products for tariff liberalisation pending the conclusion of trade agreement negotiation. It is primarily a confidence building measure.

India’s Widening Trade Deficit with Korea:

1. India’s trade deficit with South Korea in 2017-18 stood at $12 billion.
2. India’s exports to South Korea increased insignificantly from $3.72 billion in 2010-11 to $4.46 billion in 2017-18.
3. However, the imports from South Korea also rose significantly from $10.47 billion in 2010-11 to $16.36 billion in 2017-18.