The domestic steel sector has opposed bringing more products under the India-Korea free trade agreement, as cheaper imports from that country have already impacted the industry, an official said.
India and South Korea are negotiating to upgrade the existing FTA, officially dubbed as Comprehensive Economic Partnership Agreement (CEPA), for expanding bilateral trade to USD 50 billion by 2030.
Upgradation or widening of such agreement includes elimination or significant reduction of import duties on more goods.
To widen the scope of the pact, Korea wants addition of more products such as machinery and certain kinds of steel products.
"The steel ministry and the industry have opposed this demand and instead want Korean steel companies to set up manufacturing facilities in India," the official added.
Both the countries have resolved for early conclusion of talks to upgrade the existing trade pact.
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Under CEPA, both countries have eliminated duties on several goods and relaxed norms to promote investments and trade in services. It was implemented in January 2010 and is under revision.
Review of the agreement assumes significance as domestic industry has raised concerns over the utilisation of the pact.
The review is also important as India's trade deficit with Korea has increased to about USD 12 billion in 2017-18 from USD 8.5 billion in 2016-17.
Upgradation or widening of any free trade agreement (FTA) means better utilisation of the existing pact and inclusion or elimination of more goods.
The two-way trade has increased to USD 20.9 billion in 2017-18 from USD 16.9 billion in the previous fiscal.
India has attracted only USD 3.1 billion foreign direct investment from South Korea.
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