- Why in news
- India and South Korea held the 12th round of India-Korea CEPA upgrade talks in New Delhi from 25 to 27 May 2026. They agreed to set up sub-groups on digital trade, supply chains and strategic industrial cooperation.
- What it is
- The India-Korea Comprehensive Economic Partnership Agreement (IK CEPA) is a bilateral trade pact that covers trade in goods, services and investment. It came into force in 2010. The two sides are now negotiating an upgrade to modernise it.
- In force since
- The IK CEPA came into force in 2010. India's trade deficit with Korea has risen significantly since then.
- Round and dates
- The 12th round of upgrade talks was held in New Delhi from 25 to 27 May 2026.
- Areas discussed
- Talks covered trade in goods, trade in services, rules of origin and origin procedures, investment, and SPS standards.
- New sub-groups
- Sub-groups will be formed on digital trade, supply chain cooperation and strategic industrial cooperation.
- Time-bound aim
- Both sides committed to conclude the upgrade in a time-bound manner.
Don’t confuse with CEPA vs FTA: An FTA mainly cuts tariffs on goods. A CEPA also covers services, investment and wider economic cooperation.
Don’t confuse with Rules of Origin vs SPS standards: Rules of origin decide which goods qualify for tariff concessions. SPS standards govern food safety and plant and animal health in trade.
International bodies and relations: the largest group of news questions in Prelims (61 since 2013), often about background, members and location. In Mains, 27 news-triggered questions, mostly on India's interests.
Why it matters
- An upgrade can modernise a 2010 pact to cover digital trade and supply chains.
- It can help India address its trade deficit with Korea and deepen ties with a key East Asian partner.
Problems
- The trade deficit with Korea has widened since 2010, so India needs better market access and balanced gains.
- Rules of origin and non-tariff barriers can limit the benefit of concessions to Indian exporters.
Way forward
- Push for tariff and non-tariff access for Indian goods and services, especially in areas where India is competitive.
- Use the new sub-groups to build supply chain and industrial partnerships that raise Indian exports.
Put in your answer
Trade deficit: India's bilateral trade deficit with Korea has risen significantly since the CEPA took effect in 2010, a point both sides now admit.
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UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Lasting trade agreement with ongoing talks; few testable facts so far. International items are 19% of news-linked Prelims questions, but this has no new provisions.
Worth revising until Prelims 2027: most news questions come within two years of the event.