India has requested increased market entry for specific items like steel, rice and shrimp from South Korea to enhance the export potential of these commodities. These discussions are part of the ongoing negotiations to upgrade the current free trade agreement between the two nations, officially known as the Comprehensive Economic Partnership Agreement (CEPA). The agreement came into effect in January 2010, and the 10th round of upgrade talks is currently in progress.
"We are advocating for expanded market entry for products like steel, rice and shrimp", the official stated. During the meeting, India highlighted concerns about Korean companies not procuring Indian steel and mentioned that Korean firms in India often place orders with local companies in Korea, creating a disadvantage for Indian firms. The Korean side, in turn, has requested improved price competitiveness in India.
Regarding rice, there is a tariff rate quota of five lakh tonnes in Korea, with specific allocations for China, Australia, the US, Thailand, and Vietnam. However, India falls under the 'others' category, demanding either categorization as a specific country or an increase in quota. South Korea imposes a substantial import duty of 513 percent on rice. Additionally, on shrimp, there is a 5 percent import duty. Conversely, Korea is seeking greater access in sectors like auto components and chemicals. The ninth round of India-Korea CEPA upgradation negotiations took place in Seoul from November 3-4, 2022.
Both sides expressed optimism that the CEPA upgradation negotiations would play a crucial role in enhancing economic cooperation. India raised concerns about the widening trade deficit, with exports to Korea at USD 6.65 billion in 2022-23 compared to USD 8 billion in 2021-22. Imports, however, increased to USD 21.22 billion in 2022-23 from USD 17.5 billion in 2021-22.