India and the Eurasian Economic Union (EEU) Free Trade Agreement (FTA) Negotiations

India and the EEU, which includes Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan, have signed the Terms of Reference (ToR) to start negotiations on a Free Trade Agreement (FTA).

Context and Background

• Russia is the largest member of the EEU and constitutes over 92% of India's trade with the EEU.
• The FTA talks are occurring in the context of strained relations between India and the US, particularly due to new import tariffs imposed by the US.

US-India Trade Relations

• The US has imposed additional tariffs on Indian goods, doubling them to 50%, and levied an extra 25% duty on Russian crude imports.
• These actions are seen as efforts by the US to pressure India in light of the ongoing Russia–Ukraine conflict.

Significance of the FTA with the EEU

• The FTA is expected to enhance market access for Indian exporters and support diversification into new sectors.
• The EEU has a combined GDP of $6.5 trillion, offering vast economic opportunities.
• The agreement aims to increase investment flows and strengthen the India–EEU economic relationship.

Current Trade Statistics

• Trade between India and the EEU reached $69 billion in 2024, marking a 7% increase from the previous year.
• India and Russia have set a target to increase bilateral trade to $100 billion by 2030.

The commitment to an early conclusion of the FTA indicates a shared interest in developing a long-term framework for trade cooperation between India and the EEU.