India, South Korea conclude 12th round of CEPA upgrade talks

• The 12th round of India-South Korea Comprehensive Economic Partnership Agreement (CEPA) upgrade negotiations was held in New Delhi from May 25 to 27.

• The India-South Korea CEPA came into force in January 2010.

• 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.

• India and South Korea have agreed to address the widening trade deficit between the two countries within the overall framework of the bilateral trade pact.

• The two nations also decided to constitute sub-groups to discuss cooperation in the areas of digital trade, supply chain and strategic industrial collaboration.

• India and South Korea reaffirmed their commitment to conclude the CEPA upgrade negotiations in a time-bound manner, with the objective of achieving a modernised and mutually beneficial agreement that supports the shared vision of balanced bilateral trade and enhanced cooperation.

India-South Korea trade relations

• Bilateral trade has grown from $14.2 billion at the time of CEPA implementation to $26.89 billion in 2024-25, an increase of nearly 90 per cent. 

• Of this, India’s imports from South Korea account for approximately $21 billion, while exports stand at about $5.8 billion.

• 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.

• India’s key exports to South Korea include light oils and related preparations, aluminium (not alloyed), ferro-chromium, refined lead, mineral fuel distillates (primarily naphtha), cereals, and iron and steel products. 

• Major imports from South Korea comprise automobile parts, telecommunication equipment, hot-rolled iron products, refined petroleum products, base lubricating oils, mechanical appliances, electrical machinery and parts, and iron and steel products.

• South Korea is India’s 13th largest FDI investor, with cumulative investments of $6.91 billion since 2000. 

• Investment flows have accelerated significantly in the post-CEPA period, rising from $523 million to $6.386 billion, with a strong sectoral focus on metallurgy, automobiles, electronics, and manufacturing.