India, South Korea begin next round of negotiations on upgrading trade pact
India and South Korea on Monday began the next round of negotiations to upgrade the Comprehensive Economic Partnership Agreement (CEPA), which was implemented in January 2010, an official said.
The three-day talks (May 25-27) are important, as India has flagged serious concerns about the widening trade deficit between the two countries.
“This is the 12th round of India-Korea CEPA upgrade negotiations,” the Government official said.
On April 20, Commerce and Industry Minister Piyush Goyal had proposed to his Korean counterpart, Yeo Han-koo, to consider negotiating a fresh bilateral free trade agreement to make it more contemporary and address concerns over the trade deficit, the difference between imports and exports.
India’s exports to Korea increased 3.31 per cent to $6 billion in 2025-26 from $5.81 billion in 2024-25. The export growth was negative during 2022-25.
Imports grew 1.38 per cent to $21.35 billion in 2025-26 from $21 billion in 2024-25.
The trade deficit stood at $15.35 billion in 2025-26, $15.2 billion in 2024-25, $14.71 billion in 2023-24, $14.57 billion in 2022-23 and $9.4 billion in 2021-22.
Goyal stated that the original CEPA has not worked in India’s favour, and that the irrational manner in which the pact was finalised in 2010 has widened the trade gap.
According to experts, Indian exporters face certain non-tariff barriers in South Korea, including stringent standards, regulations and certification requirements, which make it difficult for Indian goods to penetrate the South Korean market.
The two countries aim to double their two-way commerce to $54 billion by 2030 from the current $27 billion, while ensuring a more balanced trade relationship.
In a CEPA, two or more countries either significantly reduce or eliminate customs duties on the maximum number of goods added between and ease norms to promote trade in services and boost investments.
Generally, review or upgrade exercises of a trade agreement include implementation issues, rules of origin, verification process and release of consignments, customs procedures, further liberalisation of trade in goods, and sharing and exchange of trade data.
