India, South Korea to form sub-groups on digital trade, supply chains under CEPA upgrade talks
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India and South Korea are accelerating efforts to upgrade their Comprehensive Economic Partnership Agreement (CEPA), establishing dedicated sub-groups for digital trade and critical supply chains. This move, announced following recent negotiations, signals a strategic pivot towards deeper economic integration and resilience amidst global trade volatility and evolving technological landscapes. The 16-year-old IK CEPA, originally signed in 2010, has seen India's trade deficit with South Korea widen significantly. The current negotiations, stemming from an April 20 Joint Declaration between Ministers Piyush Goyal and Yeo Han-koo, aim to rebalance this trade while addressing new-age challenges like data localization, cross-border data flows, and secure sourcing for semiconductors and critical minerals. This aligns with PM Modi and President Lee Jae-myung "Futuristic Partnership" vision, seeking to fortify industrial collaboration against geopolitical fragmentation. The formation of these sub-groups will fast-track discussions on thorny issues like harmonizing digital regulations and establishing robust, diversified supply corridors. Watch for specific policy proposals emerging from these groups, particularly concerning intellectual property in digital services and investment in strategic sectors, as both nations aim to finalize the updated agreement within a tight timeline, potentially by early 2027.