Strengthening Ties: India and South Korea Review Trade Agreement Amid Growing Imbalance

By Vishi Adhana Seoul (South Korea), May 26 (ANI) – India and South Korea are actively engaging in discussions to address the growing trade imbalance between the two nations. The review of the Comprehensive Economic Partnership Agreement (CEPA) is currently underway, aimed at forging a more fair and balanced trade relationship, the Indian Ambassador to South Korea, Amit Kumar, revealed on Monday.

In an exclusive conversation with ANI, Ambassador Kumar stressed the necessity of a balanced trade relationship. He mentioned both countries are exploring new economic cooperation avenues, including advancements in green hydrogen and manufacturing sectors. 'We had concluded the CEPA in 2010, which led to increased trade. However, a growing trade deficit with Korea persists, partly due to the current economic structure and level,' the envoy stated.

Furthermore, Ambassador Kumar highlighted the ongoing expansion of manufacturing in India, poised to increase exports to Korea. He pointed out issues linked to market access and non-tariff barriers are under discussion with the Korean government, emphasizing the need for a fair and balanced trade agreement.

Since the CEPA's inception in 2010, India witnessed a widening trade deficit with South Korea, with exports declining from $8 billion in 2021-22 to $6.41 billion in 2023-24. Meanwhile, imports have surged, prompting a review call to enhance India's export competitiveness. Ambassador Kumar emphasized South Korea's focus on countries like India to support its green hydrogen ambitions due to their geographic constraints in renewable energy generation. 'Both countries hold ambitious roadmaps for green hydrogen deployment, indicating promising future collaboration,' he added.

South Korean investments in India are on the rise, with Hyundai Motor Group recently committing USD 2.45 billion to India's electric vehicle ecosystem, incorporating electric vehicle manufacturing, secondary battery unit setups, and charging infrastructure. Ever-increasing interest from Korean companies in industries like shipbuilding, electronics, semiconductors, and medical devices was noted by Kumar as 'priority areas' for bilateral cooperation.

With India-Korea trade at approximately USD 25 billion, Ambassador Kumar believes there is considerable room for growth. He detailed around 15 joint research projects underway, highlighting expanding scientific collaborations and strengthened exchanges in science, technology, and people-to-people contacts. Addressing South Korea's demographic challenges, the ambassador noted the increase in Indian students, professionals, and researchers in Korea.

'We are in discussions with the ROK government to ensure safe and legal pathways through mechanisms like mobility and migration partnerships. This area will continue to develop,' he assured. (ANI)

(With inputs from agencies.)