The Comprehensive Economic Partnership Agreement (CEPA) is a concept and a broad-based bilateral or regional trade agreement that represents a deeper level of economic integration than a traditional Free Trade Agreement (FTA). While an FTA primarily focuses on reducing or eliminating tariffs on goods, a CEPA is structurally more expansive, covering trade in goods, services, investment, and regulatory cooperation.
The objective of a CEPA is to enhance bilateral trade and investment flows, strengthen supply chain integration, and promote long-term strategic economic collaboration. India has actively pursued CEPAs as part of its trade strategy, signing one with South Korea on August 7, 2009, which came into effect on January 1, 2010, and another with Japan in 2011.
A CEPA works through key provisions such as the reduction or elimination of tariffs on goods, liberalization of trade in services, and the inclusion of chapters on Intellectual Property Rights (IPR), investment protection, and effective Dispute Resolution Mechanisms. For instance, the India-Korea CEPA committed both nations to lower or eliminate import tariffs on a wide range of goods over 10 years.
A related concept is the Comprehensive Economic Cooperation Agreement (CECA), which is generally less comprehensive than a CEPA, often focusing only on trade tariffs and Tariff Rate Quotas (TRQ). CEPAs are also designed to build upon a country's existing World Trade Organization (WTO) commitments.
A significant recent development is the India-UAE CEPA, signed on February 18, 2022, and effective from May 1, 2022, which is expected to increase bilateral trade in goods to over $100 billion. Furthermore, the India-Korea CEPA was enhanced in 2018 to ease customs procedures, and the government introduced CAROTAR 2020 Regulations to address concerns over the misuse of Rules of Origin under such agreements.