India will soon start negotiations for concluding a free trade agreement (FTA) with Russia-led Eurasian Economic Union (EAEU) that will give the country a smooth access to markets of five resource-rich post-Soviet states.
Indian exporters from sectors such as engineering goods, electronics and agriculture will get a boost from the agreement, experts on the EAEU said.
The EAEU comprises Russia, Belarus, Armenia, Kazakhstan and Kyrgyzstan.
The FTA will get a lift from India’s management of the Chabahar Port in Iran, giving exporters a connectivity corridor to Eurasia.
The FTA will provide greater market access to Indian goods and services in the region, which has not been a priority for Indian exporters so far.
It will also help India, a member of SCO, in balancing China’s inroads in Eurasia.
Russia is India’s biggest trading partner among the EAEU member states with trade touching $65 billion in 2023-24.
External affairs minister S Jaishankar on Friday said India’s rise in trade with Russia should not be seen as a “temporary phenomenon” as more economic opportunities are emerging.
“For long, we have looked at Russia from a political or security perspective,” Jaishankar said at a business meet organised by CII. As that country turns eastwards, fresh economic opportunities are presenting themselves… the spike in our trade and new areas of cooperation should not be regarded as a temporary phenomenon.”
In 2022-23, India’s bilateral trade was $134.26 million with Armenia, $111.81 million with Belarus, $641.62 million with Kazakhstan and $56.56 million with Kyrgyzstan.
The EAEU already has in place FTAs with certain emerging economies.
The FTA between the EAEU and Vietnam has been implemented since 2016. An Agreement on Trade and Economic Cooperation between the EAEU and China has been in effect since 2019. The EAEU also has trade agreements with Iran, Singapore and Serbia.
The EAEU is also holding negotiations on FTAs with Egypt, the UAE and Indonesia.