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India and South Korea have set a target to increase bilateral trade to $50 billion by 2030 from $20 billion in 2017-18 and to speedily conclude negotiations to upgrade the bilateral Comprehensive Economic Partnership Agreement (CEPA).
Prime Minister Narendra Modi and South Korean President Moon Jae-in, in a joint statement following their bilateral meeting on Tuesday, welcomed the finalisation of the elements of an Early Harvest Package (EHP) that would lead to an upgraded CEPA.
“It is the right time to take bilateral relationship to the next level. We will increase the levels of consultations and broaden our scope of understanding,” Jae-in said at a joint press address.
Both Modi and Jae-in welcomed the signing of the EHP which they said was a firm step towards an early conclusion of the negotiations for CEPA expansion.
An official from the Ministry of External Affairs confirmed at an official briefing that India and South Korea had agreed to include 11 items in the EHP and duties would be reduced/eliminated for these within a fixed time period.
While South Korea had been pushing for an expansion of the CEPA so that duties are eliminated on the items left out the first time round, India is a little cautious as its trade deficit with South Korea in 2017-18 stood at $12 billion.
While India’s exports to South Korea increased insignificantly from $3.72 billion in 2010-11 (the year the CEPA was implemented) to $4.46 billion in 2017-18, its imports from South Korea jumped from $10.47 billion in 2010-11 to $16.36 billion in 2017-18. The Indian Prime Minister praised the companies operating in India and said that they have made large-scale investments in India, participated in the ‘Make in India’ programme and also generated jobs. “Because of the commitment of the companies towards maintaining quality, they have become household names in the country,” he said.
The South Korean President said that it was the right time to take bilateral relationship to the next level.
He said he was committed to raise Korea’s relations with India to the level as those with four major powers around the Korean peninsula.
More joint ventures
In the joint statement, the two leaders asked businesses, including SMEs, to get into collaborations. “We urge the business community from both our countries to leverage opportunities arising from complementarities between the two economies, to enhance investment, to promote joint ventures, and to work towards the goal of raising bilateral trade to $50 billion by 2030,” the statement said.
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