India–Korea CEPA: A Multi-Method Assessment of Trade in Articles of Iron and Steel
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India-Korea CEPA, Articles of Iron and Steel (HS Chapter 73), Difference-in-Difference, SMART Simulation.##article.abstract##
This paper critically assesses the India and Korea’s Comprehensive Economic Partnership Agreement (CEPA) trade impact, focusing on articles of iron and steel (HS Chapter 73). The study used a multimethod assessment to provide a rigorous evaluation of bilateral trade outcomes under India-Korea CEPA by using descriptive analysis to understand the tariff cuts and trade trends followed by difference-in-differences (DiD) method, and SMART partial-equilibrium simulation to disentangle residual effects. Korea by the year 2016, completely eliminated its tariff on Indian exports yet the exports recorded a modest growth. On contrary, Korea’s exports saw a sharp increase post India’s tariff cuts but later diminished due to safeguard measures and improved domestic capacity by India. The DiD results shows negative coefficients for exports and imports with non-FTA partners which implies that CEPA underperformed as compared to counterfactual. SMART simulations confirm these asymmetric results with India’s export gains supported by positive residual non-tariff effects. However, Korea’s tariff-driven benefits, as predicted, were offset via safeguard duties plus policy frictions.
Overall, the results reveal asymmetric and limited trade gains under India-Korea CEPA. The study highlights that balanced durable trade benefits results not just from tariff reduction but improved competitiveness and properly managed non-tariff barriers. Specially India needs to manage the policy related measures along with structural frictions to secure more durable trade gains
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