By Ramachandran Rajeev Kumar — 2026-05-08

India 2026 Doesn't Negotiate Like India 2009: Why Seoul Is About to Find Out

On 25 May, Indian and South Korean officials will sit down to begin the long-deferred review of the Comprehensive Economic Partnership Agreement that has governed their bilateral trade since 2010. The review is overdue, the trade deficit is wide, and the Indian side has been clear about what it wants — a rebalance, an upgrade, and a treatment that reflects the country it has become.

Seoul should expect the conversation to be polite. It should not expect it to be familiar.

What 2009 looked like

The CEPA was negotiated in a window that no longer exists. India, in 2009, was a country emerging from the global financial crisis, hungry for foreign capital, eager to be seen as open, and largely a price-taker on FTA architecture. South Korea, then a model economy that had crossed into the upper-middle-income tier ahead of schedule, was a natural partner. The deal that emerged was generous on Indian tariff concessions, modest on services, and weak on non-tariff barrier discipline.

The Indian negotiators of the day knew they were signing an asymmetric agreement. They accepted it as the cost of building the relationship. The expectation was that the asymmetry would correct itself as Indian competitiveness improved.

It did not correct itself.

What 2026 looks like

Sixteen years on, the asymmetry has hardened. India runs a structural goods deficit with South Korea that touched 15.19 billion US dollars in FY2024-25, up from 14.7 billion the year before and 9.4 billion as recently as FY2022. Steel, electronics components, petrochemicals and capital goods flow one way. Indian exports — primarily mineral ores, fuels and intermediate chemicals — flow the other way at a fraction of the volume.

Indian industry has spent a decade pointing out that some of this gap is not about competitiveness. It is about non-tariff barriers — Korean technical regulations, certification regimes, and procurement preferences that make it functionally hard for Indian firms to land in Seoul even when their goods are competitive on price. The CEPA committed both sides to address such barriers. The follow-through has been thin.

Meanwhile, India has been doing what India was not doing in 2009. It has been signing other trade deals — and signing them on terms it would not have dared to demand a decade ago.

The 2026 trade architecture, in three deals

The India that walks into the CEPA review on 25 May is the India that, in the previous four months, concluded two of the largest trade agreements of its history.

In late January, India and the European Union concluded their Free Trade Agreement, the largest ever signed by either party, building a 27-trillion-dollar combined market. The deal locked in tariff cuts on Indian textiles, pharmaceuticals, and agriculture that European negotiators had resisted for a decade and a half.

In early February, India and the United States concluded a phased trade deal in which Washington reduced reciprocal tariffs to 18 per cent from 25 per cent in exchange for Indian commitments on Russian oil purchases and a 500-billion-dollar buying programme over a decade.

These two deals are not just bilateral arrangements. Together, they are the new floor for any trade conversation India has with any partner. They establish a price for Indian market access — measured in tariff parity, services liberalisation, regulatory coherence, and procurement reciprocity — that Seoul has not yet paid.

What the Indian side will ask for

Three demands will dominate the negotiating room.

The first is rules of origin discipline. South Korean exports to India have been criticised by domestic industry as round-tripping vehicles for Chinese inputs. The CEPA's existing rules of origin are looser than the EU FTA's and far looser than the US deal's. India will push for a regional value content threshold that closes the loophole.

The second is non-tariff barrier discipline. The new India-EU FTA contains the strongest mutual-recognition language in any Indian trade agreement. The Korean equivalent is weaker. Indian negotiators will pressure for a lift to EU-grade discipline on standards, conformity assessment, and customs facilitation. Seoul will resist, and the resistance will be the test of whether Korea is reading the new room.

The third is services and digital. The 2009 CEPA was effectively silent on data flows, e-commerce, and platform services. The 2026 trade environment is shaped almost entirely by these. India will want a digital chapter that reflects the data-sovereignty doctrine the government has built since 2022 — not the Korean preference for free cross-border data flows.

What Seoul will want

The Korean asks are easier to predict. Continued investment access for chaebol-led capital — Hyundai, Samsung, LG, POSCO — into Indian manufacturing under the production-linked-incentive umbrella. Tariff certainty on auto-component exports as Korean firms continue to build out India-based assembly. And a quiet preference for the existing CEPA framework to be amended rather than replaced, because amendments are politically cheaper at home than a renegotiation.

The interesting tension is that India is now in a position to deny Seoul the cheap option. The trade-deal sequencing of the past four months has given the Ministry of Commerce a benchmark, a precedent, and a domestic political mandate. A modernisation that does not match the EU template will be hard to sell to Indian industry, which has watched the CEPA hollow out its margins for fifteen years.

The geopolitical layer

There is a layer above the trade economics, and it should be named.

South Korea is one of the United States' two key Indo-Pacific treaty allies. Its supply-chain decisions on semiconductors, batteries, and naval propulsion are increasingly steered by Washington's de-risking framework. India is now a tier-one partner of the US trade architecture too, but it is not a treaty ally and runs its own multi-alignment policy with Russia, the SCO, and BRICS.

A modernised CEPA that locks in supply-chain interdependence between India and South Korea is therefore also a piece of US Indo-Pacific architecture, whether or not Washington signs it. New Delhi knows this. Seoul knows New Delhi knows this. The negotiation that begins on 25 May is a trade negotiation in form and a strategic alignment negotiation in substance.

That second layer is where India holds the surprising amount of leverage. The Korean economy is more exposed to Chinese demand than the EU or US economies are. A deeper India relationship is, for Seoul, partly a hedge against Beijing — and hedges, by their nature, get priced higher when the underlying risk rises.

The honest conclusion

The CEPA review will not produce headlines on 25 May. It will produce, at most, a joint statement and a working-group calendar. The substance will play out over six to eighteen months.

But the frame is set today, and it is worth being clear about. India is not the country that signed the 2009 deal. The negotiators across the table from Seoul will be polite, professional, and unwilling to settle for an asymmetry that they no longer have to accept.

If South Korea wants the relationship to deepen — and it has good reasons to want exactly that — it will need to do something it has not historically done well. It will need to read the new room.

BarathVector covers India's trade and strategic affairs with the conviction that the country's negotiating posture is itself a story.