12th round of negotiations focuses on market access, supply-chain cooperation and strengthening bilateral economic ties
India and South Korea have begun the next round of negotiations to upgrade their Comprehensive Economic Partnership Agreement (CEPA), as both nations seek to modernise trade relations and address growing concerns over trade imbalances.
The three-day negotiations, being held from May 25 to May 27, mark the 12th round of discussions aimed at revising the existing trade pact, which originally came into force in January 2010.
Officials say the latest round is particularly important because India has repeatedly highlighted concerns regarding the widening trade deficit with South Korea under the current agreement framework.
India Pushes for More Balanced Trade
India has increasingly raised concerns that the benefits of the existing CEPA have been uneven, with imports from South Korea rising significantly while Indian exports have not gained comparable access.
The widening trade gap has become a key issue for policymakers as India reviews multiple free trade agreements to ensure they support domestic manufacturing, exports and employment generation more effectively.
Trade experts believe India is likely to seek:
- Better access for Indian goods and services
- Reduction in non-tariff barriers
- Easier movement for skilled professionals
- Stronger support for domestic manufacturing sectors
- Greater export opportunities for Indian companies
New Delhi has been emphasising the need for “balanced and equitable” trade partnerships while renegotiating several international agreements.
CEPA Has Been Operational Since 2010
The Comprehensive Economic Partnership Agreement between India and South Korea came into effect in January 2010 with the objective of boosting bilateral trade, investment flows and economic cooperation.
The agreement reduced tariffs across multiple sectors and encouraged closer business engagement between companies from both countries.
Since implementation, bilateral trade has expanded considerably, particularly in sectors such as:
- Electronics
- Automobiles
- Machinery
- Steel
- Chemicals
- Technology components
However, India’s imports from South Korea have grown at a faster pace than exports, contributing to a persistent trade imbalance.
Trade Deficit Remains Major Concern
India’s trade deficit with South Korea has remained a significant challenge over the years, particularly due to strong imports of electronics, auto components, machinery and industrial goods.
Industry bodies in India have argued that domestic manufacturers in several sectors faced intense competition from cheaper imports following tariff reductions under the agreement.
The government is therefore expected to push for revisions that protect sensitive sectors while improving export competitiveness for Indian industries.
Analysts believe the CEPA upgrade talks will focus heavily on correcting structural trade imbalances and improving reciprocal market access.
Strategic Economic Partnership Expanding Beyond Trade
Despite trade-related concerns, India and South Korea continue to maintain strong strategic and economic relations across several sectors.
South Korean companies remain among the largest foreign investors in India, especially in:
- Consumer electronics
- Automobile manufacturing
- Semiconductors
- Heavy engineering
- Renewable energy
- Technology infrastructure
Major South Korean corporations have established large manufacturing operations in India under the country’s “Make in India” initiative.
The two countries are also increasingly collaborating on supply-chain resilience, advanced manufacturing and emerging technologies.
Supply-Chain Diversification Gains Importance
The CEPA upgrade discussions come at a time when countries worldwide are reassessing global supply chains due to geopolitical tensions and disruptions in international trade networks.
India and South Korea are both looking to strengthen supply-chain resilience in sectors such as:
- Electronics
- Semiconductors
- Batteries
- Critical minerals
- Renewable energy equipment
Experts say enhanced economic cooperation between the two countries could help reduce dependence on single-country supply chains and improve regional manufacturing integration.
India Seeks Technology and Investment Partnerships
India is also expected to use the negotiations to attract greater South Korean investment into high-value manufacturing and technology sectors.
The government has been actively encouraging foreign investment in:
- Electronics manufacturing
- EV supply chains
- Semiconductor production
- Clean energy
- Industrial automation
South Korea’s advanced manufacturing capabilities and technological expertise make it an important strategic partner for India’s industrial ambitions.
Services and Digital Trade May Gain Focus
Apart from goods trade, the latest CEPA negotiations are also expected to cover services, digital trade and innovation partnerships.
India may seek better opportunities for its IT professionals, startups and service providers in the South Korean market, while also exploring cooperation in:
- Artificial intelligence
- Fintech
- Cybersecurity
- Digital infrastructure
- Research and development
Trade experts believe future trade agreements will increasingly focus on technology and services rather than only tariff reductions.
Global Economic Uncertainty Shapes Negotiations
The negotiations are taking place against the backdrop of slowing global trade growth, geopolitical uncertainty and rising protectionist trends across several economies.
Countries are increasingly seeking stronger regional trade partnerships to secure supply chains, attract investment and improve economic resilience.
India’s recent trade negotiation strategy has focused on signing carefully structured agreements that support domestic manufacturing while expanding export access to global markets.
CEPA Upgrade Seen as Important for Long-Term Growth
Economists believe a successfully upgraded CEPA could significantly strengthen economic ties between India and South Korea over the coming decade.
A modernised agreement may help:
- Boost bilateral trade volumes
- Improve investment flows
- Strengthen manufacturing collaboration
- Expand technology partnerships
- Create new export opportunities
As both countries continue positioning themselves within evolving Asian supply chains, the outcome of the current negotiations could play an important role in shaping future economic cooperation between the two major Asian economies.