India – Eurasian Economic Union (EaEU) FTA Talks

India and the five-member Eurasian Economic Union (EaEU), led by Russia, are likely to soon begin negotiations on a free trade agreement (FTA). This proposed agreement aims to boost India’s exports to the EaEU countries, especially in sectors such as engineering goods, electronics, and agriculture.

About EEU

The Eurasian Economic Union (EEU) is an economic union of states located primarily in Northern Eurasia. Formed by a treaty signed in 2014, it aims to ensure the free movement of goods, services, capital, and labor among member countries. The founding members of the EEU are Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.

Background of FTA Talks

Discussions on the India-Eurasian Union FTA first began in early 2020 but stalled due to the COVID-19 pandemic. Over the past few months, talks resumed between the two sides. However, formal negotiations on the FTA are yet to start. Both sides have exchanged draft texts and terms of references to take the talks forward.

India is keen on starting FTA talks quickly as its trade deficit with Russia has substantially increased after the Russia-Ukraine conflict broke out in February 2022. With India importing discounted Russian oil in large quantities, its trade gap with Russia widened massively to over $43 billion in 2022-23. An FTA would help India increase exports to Russia and bridge this deficit.

Key Details

The proposed India-Eurasian Union FTA is likely to give a boost to India’s exports of engineering goods, electronics, agricultural products, and telecom goods to Russia and other Eurasian countries. India has seen a reasonable growth in exports to Russia in products like agriculture and engineering until October 2023. However, exports of electronics and telecom items have been hit due to Western sanctions on such sales to Russia.

The Eurasian Economic Union has a combined GDP of around $5 trillion and comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan along with Russia. An FTA would provide preferential access for Indian goods and services to these markets. India is also keen to step up engagement with the resource rich Russian Far East region. Improving connectivity corridors across land and maritime routes could boost bilateral trade further.

Recent Developments

In a meeting held in Moscow on December 27, 2023, India’s External Affairs Minister Dr. S Jaishankar and Russian Deputy Prime Minister Denis Manturov discussed commencing FTA negotiations between India and the Eurasian bloc. Dr. Jaishankar tweeted that both sides finalized a cooperation program for the Russian Far East region. He added that India expects to hold an early meeting of FTA negotiators from both sides.

Category: International / World Current Affairs