WT/REG286/2  
13 September  2017 
(17-4860) Page: 1/7 
Committee on Regional Trade Agreements  Original:  English/Spanish  
 
  
COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT BETWEEN  
THE REPUBLIC OF KOREA AND INDIA  
(SERVICES)  
QUESTIONS AND REPLIES  
 The following communication, dated 12 September 2017 , is being circulated at the request 
of the delegations of the Republic of Korea and India.  
 
_______________  
 
 
Question from the delegation of El Salvador  
 
General Provisions of the Agreement  
Competition  
 
1.1.  The Parties agree to enter into consultations regarding compet ition matters, 
including the elimination , subject to their respective competitions laws, of 
anti-competitive practices that affect trade or investment between them (Article 11.3) . 
They recognize the importance of cooperation between them and consultations between 
their respective competition authorities for effective competition law enforcement . After 
the coming into force of the Competition Act of India in its entirety, consultations 
between the Parties and their respective competition authorities may be u ndertaken as 
appropriate on various matters relating to competition, including capacity building, 
exchange of information, notification procedures and principles of comity (Article 11.4 ). 
 In accordance with paragraph 4.10.1, consultations between the Part ies and their 
respective competition authorities may be undertaken after the coming into force of the 
Competition Act of India in its entirety . In this regard, what is the status of the 
Competition Act of India?  
 
Joint response from the Parties  
 
The provisions of the Competition Act of India relating to anti -competitive agreements and 
abuse of dominant position were notified on 20 May 2009 and the provisions relating to regulation 
of com binations came into force from 1 June 2011. Thus, the Competition  Act of Ind ia became 
fully operational on 1 June 2011.  
 
Questions from the delegation of the European Union  
 
Liberalization commitments  
 
1.2.  Paragraph 3.27 : Under Article 6.19, the Parties make a best -endeavour 
commitment to review their Schedules of specific commit ments at least once every 
three  years.  
 Considering that the Agreement entered into force on 1 January  2010, could the 
Parties clarify whether they have carried out any reviews of their Schedules of specific 
commitments?  
 WT/REG286/2  
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  Joint response from the Part ies 
 
 Since the entry into force of the Agreement on 1 January 2010, Korea and India have not 
carried out a review of the Schedules of specific commitments pursuant to Article 6.19. However 
the work of upgrading CEPA  which started on 27 October 2016 inter alia includes the review of the 
schedules of specific commitments are under  with a view to fu rther liberalizing commitments.  
 
1.3.  According to a press  release  published on 3 0 July, the Parties started a review of 
this Agreement:  
(http://economictimes.indiatimes.com/articleshow/59830991.cms?utm_source=conte
ntofinterest&utm_medium=text&utm_campaig n=cppst ). 
 Could the Part ies give some details on the on going review, clarifying what are the 
main objectives they wish to achieve in the area of trade in services?  
 
Joint response from the Parties   
 
 Korea and India made a statement in the name of the Joi nt Committee at the ministerial 
level on 18 June 2016 that the principle of conducting the work of upgrading CEPA is "not to 
decrease the level of liberalization commitments and the rules or standards governing the trade 
and investment attained in the CEPA ". The aforementioned general principle is also applicable in 
the area of Trade in Services. In this regard, in the area of Trade in Services, the two parties to 
further liberalize Trade in Services with a view to insuring commercially meaningful market access 
and possible Mutual Recognition Agreements/Arrangements, etc.   
 
Sector -specific commitments in trade in services  
 
1.4.  Table 3.2 India : Comparison between GATS and Agreement specific commitments : 
In its Schedule on maritime transport , India states that commitments are subject to 
domestic laws , etc. The headnote to the specific commitments says : "The commitments 
in maritime transport are made in accordance with the General Agreement on Trade in 
Services . All commitments are subject to domestic laws , entry  requirements, rules and 
regulations and the terms and conditions of the Directorate -General of Shipping, 
Reserve Bank of India and any other competent authority in India ". 
 Does this mean that a change in a domestic law can affect or nullify the 
commitmen ts in this sector?  
 
Joint response from the Parties   
 
 This means that commitments given are subject to domestic law i.e. whatever commitment 
is given can be availed of by fulfilment of requirements of domestic law on the subject.  
 
Specific commitments and  restrictions applicable to investment  
 
1.5.  Paragraphs 3.65 and 3.66 : The paragraphs state that Korea reserves the right to 
maintain any measure relating to investment in services sectors as long as they do not 
violate the obligations under Chapter 6 (trade in  services).  
 Could the Parties clarify what happens i n situations where a commitment  under 
Chapter 6 is broader in scope and less restrictive that a r eservation referring to 
Chapter  10? For example, it seems Korea takes full commitments (including for Mode  3) 
for tourism (with no limitation on scope) and at the same time Korea maintains a 
reservation where it reserves the right to adopt or maintain any measure with respect to 
tourism in rural, fishery, and agricultural sites.  Does a reservation under Chapte r 10 in 
this way overrule a commitment under Chapter 6?  
 
Joint response from the Parties   
 
 To the investment which is made for the supply of a service, Trade in Services Chapter 
applies, whereas to the investment which is made other than for supplying of a service, 
Investment Chapter applies. Applying the aforementioned principle to the example provided, if the WT/REG286/2  
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  investment on tourism service is made for the supply of the service, it is subject to the specific 
commitments made under the Trade in Service Chap ter. Meanwhile if the investment on tourism 
service is made for other than supplying of the service, it is governed by the reservation made 
under the Investment Chapter.  
 
Telecommunication  
 
1.6.  Paragraph 3.79 : Telecommunication - Section B of Article  7.3 sets  the Rules of 
Conduct for Major Suppliers . Could the Parties present the criteria used for qualifying as 
a "major supplier" ? What if the laws and regulations of each Party diverge in its 
definition ? Could the Parties also clarify whether a "major supplier " could only be a 
public entity , as it seems to understand on the basis of footnote 3?  
Joint response from the Parties   
 
 Korea defined "Major Supplier " under its domestic laws and regulations to be consistent with 
the Article 7.1  (Definitions) of the Korea -India CEPA. If the laws and regulations of each Party 
diverge in the definition  and if it is not  in conformity with the  Agreement, the divergence 
constitutes violation of the Agreement and the Parties are obliged to amend their domestic laws 
and regu lations into conformity with Article 7.1 (Definitions) of the Chapter.  
 
 In India, Major Supplier is not separately defined. India call s them "Significant Market 
Power " (SMP). The Telecom Regulatory Authority of India (TRAI)  has classified an operator having 
market share greater or equal to 30% of the relevant market as one having "Significant Market 
Power " (SMP) in its Refer ence Interconnect Offer (RIO). In case the merged entity becomes an 
SMP post -merger, then the extant r ules & regulations applicable to SMPs would also apply to the 
merged entity.  
 
 With regard to the question on Footnote 3 , the FN  stipulates that the obligations of major 
suppliers only apply with respect to those public telecommunications transport network s or 
services that result in a supplier of public telecommunications transport networks or services being 
a major supplier . Under this Chapter, the definition of the public telecommunications transport 
services  is nothing to do with the form of the enterpr ise, such as whether it is a public entity or 
not, but it is to do with to whom the services is provided. Therefore, as far as it satisfies the 
definition provided in this Chapter, private companies can be a major supplie r as well.  
 
Audiovisual co -production  
 
1.7.  Paragraph 3.81, According to Article 9.1, the Parties agreed to consider and 
negotiate co -production agreements in the audio visual sector . On 18 May 2015 the 
Parties signed the "Agreement between the Government of the Republic of Korea and 
the Government of the Republic o f India on Cooperation in Audio visual Co -production" 
that entered into force on 1 6 September  2015. 
 Could the Parties present the main provisions cont ained in the Agreement on 
audio visual co -production signed in 2015?  
 
Article 3  (Entitlement to Benefits)  
 
1. An audio -visual co -production made in accordance with this Agreement shall be fully entitled 
to all the benefits which are or may be accorded to national audio -visual work by each Party under 
the laws and regulations of that  Party.  
 
2. Any benefits accorded to an audio -visual co -production by either Party shall be 
administered, including in respect of the co -producer that may apply for, receive, and dispose of 
such benefits, in accordance with the laws and regulations of that  Party.  
 WT/REG286/2  
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  Article 7 (Temporary Entry)  
 
 In accordance with its laws and regulations in force, each Party shall endeavour to facilitate 
the entry into and temporary stay in its respective territory of the artistic and technical personnel 
and performers from  the other Party for the purpose of the audio -visual co -production.  
 
Article 10 (Institutional Mechanism)  
 
4. Either Party may request to establish an ad hoc Committee to discuss any matter related to 
this Agreement by delivering a written request to the competent authority of the other Party and 
the other Party shall give due consideration to the request. The ad hoc Committee shall comprise 
appropriate senior officials from the competent authorities and/ or other appropriate agencies and 
ministries of eac h Party. The ad hoc Committee shall discuss the matter at a time and place 
agreed to by the Parties.  
 
Article 11 (Non -Application of Dispute Settlement Provisions)  
 
 Chapter Fourteen (Dispute Settlement) of the CEPA  between Korea and India shall not apply 
to any matter or dispute arising under this Agreement. Any dispute arising out of the 
interpretation and implementation or application of any of the provisions of this Agreement shall 
be settled amicably through mut ual discussions and dialogue between the Parties.  
 
Bilateral cooperation  
 
1.8.  Paragraph 4.29 : Under Chapter 13 (bilateral cooperation), the Parties commit to 
establish and/or strengthen cooperation in a variety of areas . In particular : 
Article  13.2.2 present s some forms of cooperation to be followed in the field of energy, 
envisaging facilitation of  the cooperation between the public and private sectors of both 
Parties for the purpose of oil, gas and mineral resource s exploration and of strategic 
storage of cr ude oil, energy conservation and development of alternative fuels . 
Cooperation is also envisaged between research institutes and universities of both 
Parties, including joint research and development projects.  
 Could the Parties give further details on con crete actions carried out in this 
respect?  
 
Joint response from the Parties   
 
 There are no forms of cooperation between both Parties pursuant to Article  13.2.2.  
 
1.9.  Article 13.5 sets the rules for a closer cooperation between the Parties i n 
promoting close c ooperation among SMEs as well as the relevant agencies of the Parties.  
 Could the Parties give further details on concrete actions carried out in this 
respect?  
 
Joint response from the Parties   
 
 Ministry of Micro, Small and Medium Enterprises of the Repub lic of India and Small and 
Medium Business Administration of the Republic of Korea has signed a Memorandum of 
Understanding on Cooperation in the Field of Small and Medium sized Enterprises on 
18 June 2010.  
 
Questions from the delegation of Mexico  
 
Provisions on trade in services and investment  
 
1.10.   Paragraph 3.2 : Under Chapter 6 (on trade in services), the Agreement stipulates 
that "new services", shall be considered for possible incorporation into Chapter 6 at 
future reviews. (…)  WT/REG286/2  
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  Mexico would be grateful if Korea and India would indicate whether any new 
services covered by Chapter 6 have now been incorporated or whether any specific 
market access and national treatment commitments have been made for new services, 
in particular new financial servic es. If so, which services have been incorporated and 
what is their level of liberalization?  
 
Joint response from the Parties   
 
 Since the entry into force of the Agreement on 1 January 2010, ROK and India have not 
revised the Schedule of specific commitmen ts pursuant to Article 6.19. However in the work of 
upgrading CEPA  which started on 27 October 2016 , the Schedules of specific commitments are 
under  review  with a view to further liberalizing commitments.  
 
Liberalization commitments  
 
1.11.   Paragraph 3.27 : Under Article 6.19, the Parties make a best -endeavour 
commitment to review their Schedules of specific commitments at least once every three 
years, or earlier, at the request of either Party.  
 Mexico would like to know whether the liberalization commitments on trade in 
services have been reviewed as yet . If so, in which sectors and subsectors have 
improvements or additions been made and what level of commitment was agreed on ? 
We are particularly interested to know whether commitments were improved in 
audiovisual  services (such as motion picture project, promotion, advertising, or 
post-production services ; and co -production arrangement for film or television 
production), given the commitment made by the Parties in Chapter 9 to negotiate 
co-production agreements in  the sector . 
 
"3.6.3 Audio visual co -production  
 
3.81. The Parties agree in Chapter 9 to consider and negotiate 
co-production agreements in the audio visual sector 
(Article  9.1). The scope of the agreement includes film, 
broadcasting programmes, games, visua l effects and animation 
for exploitation in theatres and on television, videocassettes, 
videodiscs, digital devices (CD -ROM, DVD, VOD, mobile phone, 
etc.) or by any other form of distribution . Article 9.1 also 
foresees that new forms of audio visual product ion will be 
included in the co -production agreement through the exchange 
of notes between the Parties . Such co -production agreement 
shall be an integral part of the Agreement."  
 
Joint response from the Parties   
 
 Since the entry into force of the Agreement  on 1 January 2010, Korea  and India have not 
carried out a review of the schedules of specific commitments pursuant to Article 6.19.  
 
However, India -Korea CEPA upgradation negotiations have since been taken up for further 
liberalization and improvements i n commitments.  
 
Questions from the delegation of Thailand  
 
Horizontal commitments  
 
1.12.   Paragraph 3.31 : Under the GATS, India's horizontal commitments mainly cover 
mode 4 conditions and limitations, which serve as a basis for the India's commitments 
under Chapter 8.14 . In relation to commercial presence, under the GATS, India has 
national treatment limitations on collaboration with public sector enterprises or 
government undertakings as joint venture partners . Under the Agreement, the GATS are 
replicated, a nd additional conditions (FIPB approval in certain circumstances ; 
mandatory legal forms for a foreign company to set up operations in India ; and WT/REG286/2  
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  application of specific taxation laws) are added in the horizontal commitments section, 
in connection with comm ercial presence . 
a. According to India's Schedule of specific commitments, India had defined the 
additional conditions for Mode 3 (local presence) under horizontal 
commitment s to require FIPB approval in sectors where the provision of Press 
Note 1 (2005  Serie s) issued by the Government of India are attracted . As this 
condition does not appear in ASEAN -India FTA, are there any amendment s to 
India's laws and regulations relating to a foreign company set ting up 
operation s in India?  
b. According to para graph  3.31, In dia has defined additional condition s regarding 
the application of specific taxation laws . As this condition does not appear in 
India's Schedule of specific commitments under the GATS, are there any 
amendment s to India's law s and regulation s relating to taxation issue s? What 
are the additional conditions concerning the application of specific taxation 
laws under this agreement?  
Joint response from the Parties   
 
 Each of the FTAs have been negotiated based on reciprocal commitments of the part ies. 
They also reflect aspects based on the prevailing regulatory framework.  
 
 The legal framework governing investments comprises of circulars, Press Notes/Press 
Releases which are notified by the Reserve Bank of India. All of these together constitute t he 
policy framework on Foreign Direct Investment, which is transparent, predictable and easily 
comprehensible  annually.  
 
 In this regard, it is pertinent to note that the reference in the India -Korea agreement is to 
the press note 1 of 2005 whereas the re ference in the India -ASEAN  FTA is to the Consolidated 
FDI policy.  
 
Competition  
 
1.13.   Paragraph 4.27 : The Parties agree to enter into consultations regarding 
competition matters, including the elimination, subject to their respective competitions 
laws, of anti -competitive practices that affect trade or i nvestment between them 
(Article  11.3) . They recognize the importance of cooperation between them and 
consultations between their respective competition authorities for effective competition 
law enforcement . After the coming into force of the Competition Act of India in its 
entirety, consultations between the Parties and their respective competition authorities 
may be undertaken as appropriate on various matters relating to competition, including 
capacity building, exchange of information, notification procedures and principles of 
comity (Article 11.4 ). 
 Have the Parties commenced any actions for the purpose of cooperation under this 
agreement ? If yes, what actions have the Parties made?  
 
Joint response from the Parties   
 
 As regard India -Korea CEPA, the Competition Commission of India (CCI) is not aware of any 
action for the purpose of cooperation under this agreement. However, we would like to mention 
that Competition Commission of India is in the process of ent ering a  Memorandum of 
Understanding (MoU) with Korea Fair Trade Commission. The proposed MoU aims to enhance 
cooperation between the two Competition Authorities.  
 WT/REG286/2  
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  Question from the delegation of the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu  
 
Provisions on trade in services  
Sector -specific commitments in trade in services  
Financial services  
 
1.14.   Paragraph 3.40 of the Factual Presentation states that India has provided some 
partial improvements, such as grant of favourable consideration, to the application for 
establishment of branches by Korean banks, etc.  
 How has the establishment of Korean bank branches fared in India since the CEPA 
has entered into force?  
 
Joint response from the Parties   
 
 Four Korean banks had entered into India over four years  after the Korea -India CEPA was 
enacted on 1 Jan uary 2010. Two out of four banks were established as a branch and the remaining 
two were only representative offices.  
 
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