The agreement will ease restrictions on foreign direct investment. Companies can own up to 65% of a company in the other country.  Both countries avoided problems in agriculture, fisheries and mining and chose not to reduce tariffs in these areas. This was due to the very sensitive nature of these sectors in the respective countries.  Trade between India and South Korea amounted to $15.6 billion in 2008. This is a significant increase from 2002, when total trade was $2.6 billion.  The Korea Institute of International Economic Policy estimates that the agreement will increase trade between the two countries by $3.3 billion.  After 12 rounds of negotiations between January 2005 and September 25, 2008, the Committee completed its deliberations and entered a period of legal scrutiny by both governments.  The law was passed by the Indian Parliament on July 2, 2009, and then by the South Korean Parliament on November 6, 2009.  In July 2018, India`s Minister of Trade and Industry and the Republic of Korea`s Minister of Commerce signed trade and industrial agreements, updating CEPA.
The two countries have reduced tariffs to 11 tariff headings to expand bilateral trade.  The goal is to increase bilateral trade to $50 billion by 2030.  Although the Pact boosted South Korea`s exports to India, there was no corresponding increase in Indian exports to South Korea, which led to a widening trade deficit between the two countries. Under these agreements, South Korea accepted a duty-free Indian export of 15,000 tons of shrimp – India`s largest naval export to South Korea. Both sides agreed to issue intra-company transferees with a multiple-entry visa with a validity period of three years or the duration of the contract, whichever is shorter. India has agreed to provide for a gradual reduction of tariffs on three major categories of Korean imports over a period of 10 to 15 years, including base oil. The Koreans, on the other hand, would reduce tariffs in 8 to 10 annual payments. For example, the 30% tax on malt-based beer would expire in the eighth year. On castor oil and its fractions, the 5% customs duty would become zero in 10 years. However, South Korea has not agreed to give India the status of an “English-speaking nation,” although it has granted it to some countries, including South Africa. This could have opened up E2 teaching visa opportunities for Indians in South Korea.
 As agreements on the mutual recognition of local qualifications of different professionals take some time, New Delhi wants both countries to accept home country certification for professions identified in the meantime, the official added. RCEP has sought to integrate ASEAN countries and the bloc`s Free Trade Agreement (FTA) partners – India, China, Japan, South Korea, Australia and New Zealand – into a free trade area. Originally presented as an alternative to the Trans-Pacific Partnership (TPP), RCEP took on a new dimension after the US pulled out of the TPP and then launched a trade war, mainly against China. The deal was signed at a time when India seemed anxious to shake off its label of “protectionist” in the face of the impasse in the Doha Round of negotiations at the World Trade Organization (WTO). India then experienced a period of growth of about five years unprecedented in its history. This economic growth has attracted potential partners and has also prompted India to adopt an ambitious trade policy – in terms of engagement in bilateral trade and investment agreements. During this phase, India participated in the Association of Southeast Asian Nations (ASEAN) and the South Asian Free Trade Area (SAFTA), as well as bilateral countries such as Singapore, South Korea and Sri Lanka.  In January 2005, the two sides formed a joint task force to assess the feasibility of a free trade agreement between the two countries.
Over the next four years, the Joint Task Force reviewed the $7.1 billion in existing trade between the two countries and negotiated an agreement that took into account the weaknesses and economic strengths of the two countries` markets. Rahul Khullar, India`s minister of commerce and a member of the Joint Study Group, argues that such cooperation has taken place during discussions on the agricultural sector, which is particularly weak in South Korea but thriving in India.  The Comprehensive Economic Partnership Agreement (EFCA) is a free trade agreement between India and South Korea.  The agreement was signed on August 7, 2009.  The signing ceremony took place in Seoul and the agreement was signed by Indian Trade Minister Anand Sharma and South Korean Trade Minister Kim Jong-Hoon.  Negotiations lasted three and a half years, with the first meeting taking place in February 2006. The agreement was adopted by the South Korean Parliament on 6 November 2009.  It was passed in the Indian Parliament next week.  Following its adoption, the agreement entered into force sixty days later, on 1 January 2010.  It corresponds to a free trade agreement.  The agreement will provide better access to India`s services industry in South Korea.
Services include information technology, engineering, finance and the legal sector.  For South Korean car manufacturers, tariffs will be reduced to less than 1%.  Meanwhile, Korean companies flooded India with cheaper imports of raw metals, steel and finished products. The agreement for South Korea joins a long list of existing bilateral and multilateral free trade agreements created under Korean President Roh Moo-hyun.  As for India, the negotiations coincided with the Look East initiative of outgoing Indian Prime Minister Manmohan Singh, which promised greater regional integration between India and East Asian markets. The Republic of Korea and India met on the 7th. A Comprehensive Economic Partnership Agreement (CEPA) was signed in Seoul in August 2009, heralding a new era of stronger economic exchanges between the two countries. CEPA was negotiated over twelve cycles over more than three years and came into force on January 1, 2010.  Early harvest offers are generally precursors to the Final Free Trade Agreement; these are mainly confidence-building measures. The development of a mutually beneficial trade and economic relationship between India and South Korea will undoubtedly help the economies, both of which are in urgent need of finding economic stimulus.
However, both economies have their own problems to solve – structural and development. Some of these issues are certainly internal in nature and should be addressed internally. Following the implementation of CEPA in 2010, India`s growing trade deficit with South Korea remains a concern. The overall deficit exceeded $12 billion, of which the goods trade deficit accounts for the largest share, as shown in Figure 1. For an oil-importing economy like India, this has remained a problem. The balance of payments deficit, or the gap between exports and imports of goods and services, has always been a risk that India is trying to avoid. Therefore, a new CEPA update between South Korea and India must solve this problem. The Comprehensive Economic Partnership Agreement (EFCA), signed between India and South Korea on 7 August 2009 and entered into force on 1 January 2010, remains a turning point in relations between the two countries. CEPA is a bilateral agreement covering trade in goods and services, investment, competition and intellectual property rights (IPR). Various estimates show that the share of RCEP in global GDP could reach 50% by 2050. Fears that India could be ruled out if it decided not to join the group worried Indian politicians. But given the economic influence of China and other economies, it may have been very difficult for India to get a significant share of this RCEP pie.
Instead, the country can do well to make realistic attempts to seize opportunities through bilateral negotiations and trade agreements – where Indian concerns can be clearly presented and articulated. The CePA between South Korea and India provides such a platform. The South Korean economy is also going through a difficult time in the current global scenario. Although South Korea is a high-income economy with a GDP per capita of $33,634, it currently faces low inflation and a likely slowdown in GDP growth (Table 2). India called for accelerating the revision of the Comprehensive Economic Partnership Agreement (CEPA) between India and South Korea to close the country`s high trade deficit. In the second quarter of 2019, the South Korean economy recovered from a relatively poor performance in the first quarter, mainly due to increased government spending. Private sector investment remained at a lower level, suggesting that government investment drove expansion in the second quarter of 2019.  The volatility of trade tensions with Japan is also hampering South Korea`s economic progress. India will also benefit from CEPA, which will allow the temporary movement of professionals such as computer programmers, software engineers and English teachers to the Republic of Korea.163 These professions would have access to the Korean services market.
However, the worrying aspect of India`s trade scenario is the current account deficit of 1.4% of GDP on average in 2014-18. . .