NEW DELHI, Apr 20 : India on Monday proposed Korea to consider negotiating a fresh bilateral free trade agreement to make it more contemporary and address concerns over the trade deficit.
The two countries are also aiming to double their two-way commerce to USD 54 billion by 2030 from the current USD 27 billion while ensuring a more balanced trade relationship.
Commerce and Industry Minister Piyush Goyal said he made the suggestion to his Korean counterpart Yeo Han-koo, who is accompanying South Korean President Lee Jae Myung.
The two already have a comprehensive economic partnership agreement (CEPA). It was mplemented in January 2010.
Both sides were holding meetings to review and upgrade the existing CEPA.
“All options are there on the table. The original work that was happening was upgrading the current CEPA. I have suggested to my counterpart that we may even consider rewriting the new chapter, completely new FTA (free trade agreement) because it should be more contemporary. A lot of water has flown down the Ganga in the last 16 years. The world has changed, the global order has changed,” Goyal told reporters here after meeting Han-Koo.
The minister on multiple occasions has flagged India’s concerns over the widening trade deficit between the two countries.
“I have often shared that the original CEPA signed in 2010 has not worked for India. Our trade deficit because of the irrational way in which the CEPA was finalised in 2010 has led to tripling of our trade deficit with Korea,” he said.
India’s exports to Korea dipped 9.3 per cent to USD 5.81 billion in 2024-25 from USD 6.41 billion in 2023-24. Imports dipped marginally by 0.34 per cent to USD 21 billion in 2024-25, leaving a trade deficit of USD 15.19 billion. It was USD 8 billion in 2020-21.
He said India today comes with a lot of strengths on the negotiating table.
“Let’s see, we will now let the chief negotiators (of India and Korea) come up with some options for us,” he added.
The minister said huge opportunities for cooperation in sectors such as modern technologies are there in both nations.
The two nations have also discussed setting up of Korean enclave in India on the lines of Japanese township.
The enclave will have plug and play infrastructure for industries besides schools, colleges, hotels, and restaurants.
“We believe it will help us attract large pools of investment capital,” Goyal said, adding that several MoUs were exchanged between the private sector of the two nations.
“For example, a large steel plant with an investment of nearly USD 6 billion being set up in Odisha, including investments in areas like green energy, technology-based companies and beauty care products,” he said.
As part of the CEOA review, India has earlier sought greater market access for certain products like steel, rice, and shrimp from South Korea to boost exports of these goods. It had also flagged issues over Korean firms not buying Indian steel.
Speaking at the India-Korea Business Forum, Korean President Lee Jae Myung said that India, as the world’s fourth-largest economy and home to 1.4 billion people, stands as a key pillar of the global economy.
He noted that there is significant scope to further expand business and trade, adding that bilateral trade has considerable room for growth and, with sustained efforts, is expected to double alongside ongoing negotiations on the CEPA.
The President emphasised on the need to prepare high-tech industries for the future through collaboration and by leveraging India’s strengths in artificial intelligence.
He said huge opportunities are there to increase collaboration in the shipping sector. (PTI)
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