India to begin FTA talks with Russia-led economic bloc in Jan: Jaishankar

India, Russia to step up discussions on an investment pact, multiple connectivity routes

India will begin trade negotiations with the Eurasian Economic Union (EEU) bloc of countries for a free trade deal in January, External Affairs Minister S Jaishankar said on Wednesday in Moscow.

Addressing a press conference with his Russian counterpart Sergey Lavrov after both had extensive discussions as part of the annual India-Russia bilateral engagements, Jaishankar said that trade, investments and logistics had figured extensively in their talks.

The EEU is an economic union of five post-Soviet states — Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia — with an integrated single market. Coming into force in 2015, the EEU currently consists of 183 million people and a gross domestic product of over $2.4 trillion.

An agreement with the bloc will open the lucrative Central Asian consumer market to Indian goods. It will also entrench the expansion of Indian products in Russia, which has suffered a flight of Western brands and goods after Russia attacked Ukraine early last year.

The ministerial meeting also saw talks on mutual investments, and the need to progress on a bilateral investment treaty, Jaishankar said. He stressed that both nations “discussed long-term arrangements” to ensure flows of fertilisers and coking coal.

Energy and connectivity

The minister said India was keen on expanding oil and gas investments in Russia. Prospective implementation of joint projects for the development of hydrocarbons on the Arctic shelf and the Russian Far East figured in the talks. A delegation from the region will visit India next month. They may participate at the next month’s Vibrant Gujarat Summit, where a considerable Russian presence was expected, Jaishankar said.

In nuclear energy, both signed two important amendments on Tuesday to construct future power generating units at the Kudankulam nuclear power project, India’s largest, in Tamil Nadu that is being developed with technical assistance from Russia.

Jaishankar said both sides had discussed proposals to increase connectivity between Western India and Russia through the International North-South Transport Corridor (INSTC). The INSTC was India’s grand plan to cut short the time taken for trade shipments to reach Russia and Europe, and enter the Central Asian markets, and vice versa. It incorporates thousands of kilometres of all-weather highways from the Iranian port of Chabahar in the south, through Azerbaijan in the north, and onwards to Russia and Europe.

Both sides also discussed connectivity from eastern India, from Chennai to Vladivostok, and the polar route. Related areas where India’s polar capabilities could be enhanced in collaboration with Moscow were also discussed.

Jaishankar said India would like to see more Russian tourists in India. “We have increased the number of flights from India every week, from 52 to 64. We are open to increasing it further,” he said.

Committed to Russia

Jaishankar said that both nations had benefitted enormously from the bilateral ties, and they remain very steady and strong. “They are based on our strategic convergence, on our geopolitical interests, and because they are mutually beneficial,” he said.

The ties have come under intense scrutiny after the Ukraine war, with the United States and Western nations criticising India over its continuing bilateral engagement with Russia.

“My presence here today and the fact that all the developments that I have pointed out including our growing trade investments, our military-technical cooperation, our connectivity projects, all of this will give you a good sense of the importance and value that we attach to the relationship,” he stressed.

The ministers also discussed the global strategic situation, including the ongoing hostilities in Ukraine and Gaza, as well as the Indo-Pacific, Asean (Association of Southeast Asian Nations), and Afghanistan. “It’s been a very, very good discussion. Minister Lavrov and I have met regularly in the course of this year. I think that’s a very natural interaction between two countries, which have such a strong and close history of cooperation,” Jaishankar said.