Image Source: Hindustan Times
A major step toward closer economic integration between India and the Eurasian Economic Union (EAEU) has been taken as both entities signed Terms of Reference (ToR) to launch negotiations for a landmark Free Trade Agreement (FTA) in Moscow. This decision promises to unlock new trade potential, broaden market access, and deepen cooperation between India and the five EAEU members—Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan.
Key Highlights: The Road to the Indo-EAEU Free Trade Agreement
The ToR for negotiations was formally signed by India’s Additional Secretary of Commerce Ajay Bhadoo and Mikhail Cherekaev, Deputy Director of Trade Policy at the Eurasian Economic Commission, the permanent regulatory body of the EAEU.
India and the EAEU together boast a combined GDP of approximately $6.5 trillion, with a burgeoning two-way trade tally that reached $69 billion in 2024—a 7% rise over the previous year.
Russia is by far the largest EAEU trade partner for India, accounting for more than 92% of trade within the bloc, fueled recently by growth in oil and commodity imports.
The agreement comes amidst dynamic global trade shifts, with India facing elevated US tariffs and seeking to diversify its export markets in response.
Expanding Trade Horizons: What’s at Stake
The proposed FTA is expected to enhance market access for Indian exporters in key sectors like pharmaceuticals, chemicals, agriculture, textiles, engineering goods, and information technology.
For the EAEU, the FTA could pave the way for expanded access to India’s vast consumer market, especially as the bloc seeks to lessen reliance on traditional European trade partners.
Both sides anticipate significant benefits for micro, small, and medium enterprises (MSMEs)—the backbone of India’s manufacturing and export sectors—via more favorable tariffs and reduced regulatory barriers.
The FTA will also enhance competitiveness against non-market economies and foster sector-specific cooperation in emerging technologies, education, infrastructure, and energy.
Next Steps and Negotiation Framework
The ToR provides a roadmap for comprehensive negotiations, with working groups set to address customs duty reduction, e-commerce, investment protection, technical standards, dispute resolution, and regulatory alignment.
Both parties have affirmed their intent to expedite talks and reach an early conclusion, highlighting a shared interest in establishing a long-term institutional framework for trade and economic cooperation.
The EAEU cited the signing as an opportunity to leverage the North-South Transport Corridor, boosting connectivity and logistical efficiency for both Indian and Eurasian businesses.
New Opportunities Amid Global Trade Uncertainty
The commencement of FTA talks comes at a time when India’s trade deal with the US remains stalled, and tariff tensions have been compounded by geopolitical developments, including sanctions and shifting supply chains.
The EAEU-India partnership is widely seen as a way to counterbalance Western trade constraints while opening up new investment flows, technology exchange, and energy cooperation opportunities.
This move is poised to diversify India’s trading basket and reduce dependence on select geographies for critical imports, particularly energy and strategic minerals.
Conclusion
As India and the Eurasian Economic Union embark on FTA negotiations, both sides are positioned to realize significant benefits—unlocking untapped trade potential, supporting diversified growth, and strengthening resilience against an unpredictable global trade backdrop. This historic step reaffirms India’s commitment to deepening regional partnerships and building a more robust, multipolar international economic order.
Sources: Hindustan Times, Business Standard, CNBC TV18
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