The India-Korea Comprehensive Economic Partnership Agreement (CEPA) has been in force since 2010, offering Indian importers substantial Basic Customs Duty savings on Korean auto parts, steel, petrochemicals, and electronics. Sea Air Cargo Systems helps Bengaluru manufacturers verify origin, obtain Form Korea-India, and claim CEPA benefits at BLR airport and ICD Whitefield.
India-Korea CEPA (in force 1 January 2010) provides preferential BCD rates on Korean auto parts, steel, and electronics components. The qualifying document is Form Korea-India, issued by KCCI or KOTRA. Auto parts (Hyundai/Kia supply chain) drop from 10-15% to 0-7.5%, steel from 7.5-15% to 0-5%. The agreement only covers originating goods — goods merely transhipped through Korea from China or Japan do not qualify. IGST is not waived by CEPA; it is calculated on the reduced duty-inclusive value.
The India-Korea CEPA tariff schedule covers over 8,000 product lines with staged duty reductions. For Indian manufacturers and traders, the most valuable concessions are in automotive components, steel products, petrochemicals, and certain electronics. Unlike the ASEAN FTA where many lines went to 0% immediately, Korea CEPA uses a phased elimination approach — so the exact rate depends on when the product reached its target elimination year.
| Product Category | HS Code Examples | MFN BCD | CEPA BCD | Net Saving |
|---|---|---|---|---|
| Auto parts (engines, transmissions) | Ch 87 (8409, 8708) | 10% – 15% | 0% – 7.5% | 5% – 15% |
| Steel products (flat, long) | Ch 72, 73 | 7.5% – 15% | 0% – 5% | 5% – 15% |
| EV batteries & components | 8507 | 20% | Reduced / staged | Variable |
| Petrochemicals & polymers | Ch 29, 39 | 5% – 10% | 0% – 5% | 2.5% – 10% |
| Electronics components | Ch 85 (limited) | 0% – 10% | 0% – 5%* | Minimal* |
*Electronics components see limited additional benefit because many HS lines are already at 0% under the WTO Information Technology Agreement (ITA-1). For products not covered by ITA-1, CEPA may still offer 2.5% to 5% savings.
The Hyundai and Kia supply chain is the largest beneficiary of Korea CEPA in India. Korean original equipment manufacturers (OEMs) and their tier-1 suppliers import engine parts, brake systems, body panels, and electrical components at preferential rates, directly reducing the landed cost of components used in Indian-assembled vehicles. If you are a vendor in this supply chain, verifying CEPA eligibility on every shipment is essential to remain cost-competitive.
For a comprehensive overview of all FTA options, read our India FTA guide. If you are importing machinery from Korea, see our machinery import guide for HS-specific requirements.
The Form Korea-India Certificate of Origin is the sole document that entitles Indian importers to claim CEPA preferential duty rates. It is issued by two authorised bodies in South Korea: the Korea Chamber of Commerce and Industry (KCCI) and the Korea Trade-Investment Promotion Agency (KOTRA). The certificate is strictly shipment-specific — it must reference the exact commercial invoice number, date, HS code, and vessel or flight details.
Indian customs accept electronic Certificates of Origin (e-CoO) provided they contain the necessary digital signatures and verification mechanisms. The e-CoO must be verifiable through the issuing body's online portal. Physical copies are still common for sea freight, while air freight increasingly uses e-CoO for faster clearance.
The rules of origin require that the product have at least 35% Korean value content or undergo a change in tariff heading (CTH) as a result of substantial manufacturing in Korea. This means goods assembled in Korea using predominantly Chinese or Japanese raw materials may fail the origin test. The Form Korea-India must explicitly state which origin criterion is satisfied. Customs officers at BLR airport and Chennai port regularly scrutinise Korean CoOs for compliance with this threshold.
Critical accuracy point: the CoO must be presented at customs before or at the time of clearance. It cannot be submitted after Out-of-Charge (OOC). Importers who discover a missing or invalid CoO after clearance must pay the full MFN duty differential plus interest. Sea Air Cargo Systems verifies every Korean CoO for completeness before the Bill of Entry is filed, eliminating this risk.
If you are new to importing from Korea, read our South Korea import guide for a complete documentation checklist.
Unlike the ASEAN-India FTA, where many tariff lines moved to 0% immediately upon entry into force, the India-Korea CEPA employs a staged elimination framework. Products were assigned to different reduction schedules: some reached 0% by 2015, others by 2018, and a residual category still carries a small preferential duty above zero.
This staged approach was negotiated to protect sensitive Indian industries — particularly steel, petrochemicals, and auto components — from immediate Korean competition. For importers, this means you cannot assume all Korean goods are duty-free. You must check the exact HS code against the current CEPA tariff schedule to determine the applicable preferential rate in 2026.
Examples of staged elimination: many auto parts reached 0% by 2015, while certain steel flat products still carry a residual 2.5% to 5% CEPA BCD as of 2026. Petrochemicals largely reached 0% by 2018, but specialty chemicals may retain 2.5%. Electronics components covered by ITA-1 were already at 0% MFN, so CEPA provides no additional benefit on those lines.
The Department of Commerce periodically updates the CEPA tariff schedule. Sea Air Cargo Systems maintains current schedules and can verify the exact 2026 CEPA rate for your HS code before you place your purchase order. For EV battery imports under HS 8507, see our HS 8507 guide.
Let us walk through a realistic import scenario to show how CEPA savings work in practice. A Bengaluru auto component manufacturer imports engine transmission parts from a Korean supplier under the following terms:
MFN duty calculation:
CEPA duty calculation:
Net savings: ₹3,86,750 (24% reduction in total duty outgo)
This example illustrates an important principle: because IGST is calculated on the duty-inclusive value, reducing BCD also reduces the IGST base. The cascading effect means a 7.5 percentage point BCD reduction (from 12.5% to 5%) produces a 24% total duty saving. Note that IGST itself is not waived by CEPA — the reduction in IGST is a mathematical consequence of the lower BCD.
For manufacturers in Peenya and surrounding industrial areas, we provide end-to-end clearance at our Peenya freight forwarding desk. Contact us to model CEPA savings for your specific Korean imports.
The India-Korea Comprehensive Economic Partnership Agreement (CEPA) is a bilateral free trade agreement between India and South Korea. It entered into force on 1 January 2010. CEPA provides preferential Basic Customs Duty (BCD) rates on thousands of tariff lines, including auto parts, steel products, petrochemicals, and machinery. However, only goods that originate in South Korea qualify — goods merely transhipped through Korea do not.
Under the India-Korea CEPA, auto parts (HS Chapter 87) that originate in South Korea attract preferential BCD rates of 0% to 7.5%, compared to MFN rates of 10% to 15%. For example, engine parts and transmission components often drop from 12.5% to 0% or 5%, depending on the staged elimination schedule. This creates significant savings for Hyundai and Kia supply chain importers in India.
Form Korea-India is issued by the Korea Chamber of Commerce and Industry (KCCI) and the Korea Trade-Investment Promotion Agency (KOTRA). The certificate is shipment-specific and must be applied for by the Korean exporter before shipment. Indian customs also accept electronic Certificates of Origin (e-CoO) if they contain the required digital signatures and verification QR codes.
Yes, steel products classified under HS Chapters 72 and 73 that originate in South Korea qualify for preferential BCD rates under CEPA. The MFN rates of 7.5% to 15% are reduced to 0% to 5% depending on the specific product and staged elimination timeline. However, the steel must have at least 35% Korean value content or undergo substantial manufacturing in Korea to qualify.
Yes, in most cases you can combine CEPA and EPCG benefits. The EPCG scheme allows import of capital goods at 0% BCD against an export obligation. If you are importing Korean capital goods, you would typically use EPCG for the BCD waiver rather than CEPA. For raw materials and components, CEPA provides the BCD reduction. Our CHA team can advise on the optimal duty structure for your specific import.
The rules of origin under India-Korea CEPA require that qualifying goods either be wholly obtained in South Korea, or undergo substantial transformation with at least 35% Korean value content. The change-in-tariff-heading (CTH) rule also applies to many product categories. Goods assembled in Korea using predominantly Chinese or Japanese components may not meet the origin threshold. The Form Korea-India must specify which origin criterion is met.
Speak with our licensed CHA team about Form Korea-India verification and duty modelling.
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