NEW DELHI: Commerce and industry minister Piyush Goyal on Monday said that India plans to set up a dedicated “Korea enclave” or a large industrial township with plug-and-play infrastructure to attract greater investment from South Korean companies.
Speaking at the India Korea Business Forum, Goyal said that the proposed enclave, discussed between Prime Minister Narendra Modi and South Korean President Lee Jae-myung, is aimed at creating a ready ecosystem for Korean firms, with industrial, commercial and social infrastructure to ease operations and improve investor comfort.
“Schools, colleges, hotels, restaurants can all be made available so that expatriates who come from Korea, bringing technology and running Korean companies here can also feel at home and we believe that this will help us attract large pools of investment and capital,” added Goyal on the sidelines of the event.
Goyal said the two sides have agreed to upgrade the India–Korea Comprehensive Economic Partnership Agreement on a “fast-track, mission mode” basis. The review will focus on addressing non-tariff barriers, easing rules of origin, expanding market access and simplifying business processes to make bilateral trade more balanced.
“The aim is to move towards a more equitable economic partnership and not one defined by large trade deficits,” he said, noting that the current framework had not worked in India’s favour.
Goyal said the two sides have agreed to work on a mission mode to upgrade the India–Korea Comprehensive Economic Partnership Agreement (CEPA), addressing several non-tariff barriers, making it easier to do business between the two countries, easing the rules of origin, expanding market access and opening up the doors in both countries.
The CEPA, which came into force in 2010, was India’s first such agreement with a major East Asian economy and aimed to liberalise trade in goods and services and promote investment flows. While it led to an expansion in bilateral trade, India has raised concerns that tariff concessions disproportionately benefited Korean exports, particularly in electronics, automobiles and steel. This has resulted in a widening trade deficit, prompting New Delhi to seek a review of the agreement to ensure more balanced gains.
“The original comprehensive economic partnership agreement signed in 2010 has not worked for India because of the irrational way in which the CEPA was finalised in 2010. It has let to tripling of our trade deficit with Korea. We will work towards doubling our trade in the next four years until 2030, while also working towards a more balanced trade deal,” added Goyal on the sidelines.
Goyal added that doubling bilateral trade by 2030 would require annual growth of around 18 per cent, underscoring the need for both sides to address structural issues and improve market access.
India is seeking to finalise a mechanism through which it can secure preferential access in the US market compared to its competitors, in its trade talks in Washington, Goyal said at the sidelines of the event.
“We have almost finalized our free trade agreement with them. We are trying to cross the Ts and dot the Is, and work out what would be the mechanism by which India can get preferential market access in the US market, compared to our competitors. The team will be discussing these aspects while they are in Washington,” he said.
An Indian delegation led by chief trade negotiator Darpan Jain has travelled to Washington, D.C. for another round of discussions with officials from the United States on a proposed bilateral trade agreement, with talks focusing on issues related to tariffs, market access and regulatory frameworks.
The US ambassador to India Sergio Gor wrote on X: “The Indian trade delegation will be arriving in Washington this week. A great step to finalize our bilateral trade deal. A win-win for both nations!”
On February 20, the US Supreme Court revoked President Donald Trump’s authority to use the International Emergency Economic Powers Act (IEEPA) for imposing country-specific “reciprocal” tariffs. Thereafter, the US administration imposed a blanket 10 per cent surcharge on all countries for 150 days from February 24.
India and the US had announced a trade deal on February 2 and had planned to sign the pact by March. A joint statement for the same was released on February 7 and the 25 per cent additional ad-valorem tariffs imposed by the US on certain Indian exports due to the country’s Russian oil imports were removed. According to the interim deal, the US had agreed to reduce tariffs on India to 18 per cent.
Since the Supreme Court judgement, the Indian side has reiterated that it will ‘wait’ to sign the interim trade deal with the US till the administration is ‘ready’ with the new global tariff architecture. The meeting later this month is expected to give clarity on the way forward for the tariffs. Both sides are also expected to finalise details related to the non-tariff barriers and matters related to the US tariff under section 232 — finalised under the interim deal. India is also expected to seek clarity on the Section 301 investigations initiated by the US.
Source: Business Standard
