India to initiate free trade talks with Georgia

Announcement comes a day after visiting Australian PM pitched for early talks on the CECA

India and Georgia on Tuesday decided to initiate talks on a free-trade agreement (FTA).

Commerce and industry minister Nirmala Sitharaman signed a joint statement to start a feasibility study on a potential FTA.

Upon the completion of a joint feasibility study, the two nations may proceed to negotiate on the FTA.

This comes a day after visiting Australian prime minister Malcolm Turnbull pitched for early round of talks on the proposed comprehensive economic cooperation agreement (CECA).

At the crossroads of Western Asia and Eastern Europe, Georgia is part of the southern Caucasus region. With the nation bordering Azerbaijan and Russia, the countries through which the ambitious International North South Transport Corridor (INSTC) runs, movement of shipments may become smoother, a Delhi-based trade expert said.

Already operational, the corridor includes railways, road, and ship linkages connecting Iran’s southern port Bandar Abbas to the Russian port city of Astrakhan over a 3,200-km distance.

While India has a positive trade balance with Georgia, trade remains low. During the April-February period of 2016-17, exports to Georgia stood at $83 million while imports from the nation were $28 million.

Among exports, rice and industrial plastic products dominate with sizable shipments of small machinery, iron products, and pharmaceuticals also present. Imports are overwhelmingly in fertilizers and aluminium

The nation has historically been economically aligned with the Russia-dominated Commonwealth of Independent States (CIS) from Central Asia. However, after becoming part of the European Union's (EU) Free Trade Area in 2014, the EU has become the largest trade partner of Georgia.