India and South Korea are set to hold negotiations on May 25 to review their Comprehensive Economic Partnership Agreement (CEPA), according to a PTI report. The move comes as India pushes to address concerns over the widening trade deficit with Seoul.
Background of the CEPA
The CEPA between the two nations came into effect in January 2010. An official confirmed that representatives from both countries will meet on May 25 for the free trade agreement review. The discussions are significant as India has proposed negotiating a fresh bilateral trade agreement to modernize the existing pact and make trade relations more balanced.
Trade Imbalance Concerns
Commerce and Industry Minister Piyush Goyal raised the issue during a bilateral meeting last month with his South Korean counterpart Yeo Han-koo. Goyal has repeatedly flagged concerns over the growing trade imbalance between India and South Korea.
India's exports to South Korea declined by 9.3 percent to $5.81 billion in 2024-25 from $6.41 billion in 2023-24. Imports from Korea dipped marginally by 0.34 percent to $21 billion during the same period. The trade deficit widened to $15.19 billion in 2024-25, up from around $8 billion in 2020-21.
Future Trade Targets
Despite the deficit, both countries have set an ambitious target to double bilateral trade to $54 billion by 2030 from the current level of around $27 billion, while seeking a more balanced trade relationship.
The upcoming talks are expected to focus on addressing structural issues and enhancing market access for Indian goods and services in South Korea.
