India, Eurasian Economic Union ink terms of reference for trade pact talks

India and the five-nation Eurasian Economic Union bloc on Wednesday inked terms of reference to start formal negotiations for a proposed free trade agreement, an official statement said.

The five members of the Eurasian Economic Union (EAEU) are Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.

The development is important as India is looking to diversify its export markets due to high tariffs imposed by the US.

The terms of reference (ToR), the commerce ministry said, provides the framework for negotiations and is expected to unlock untapped trade potential, increase investments and establish a stronger, durable IndiaEAEU economic partnership.

Both sides reaffirmed their commitment to the early conclusion of the agreement and to building a long-term institutional framework for trade cooperation, it said.

 

The two-way trade stood at $69 billion in 2024, an increase of 7 per cent over 2023.

With a combined GDP of $6.5 trillion, the proposed free trade agreement (FTA) is expected to expand market access for Indian exporters, support diversification into new sectors and geographies, enhance competitiveness against non-market economies, and deliver significant benefits to Micro, Small and Medium Enterprises (MSMEs), the ministry said.

"India and the Eurasian Economic Union (EAEU) signed the ToR to launch negotiations on an FTA today in Moscow," it said.

It was signed by Additional Secretary in the Department of Commerce Ajay Bhadoo, and Deputy Director, Trade Policy Department, Eurasian Economic Commission (EEC), Mikhail Cherekaev.

In such agreements, two or more trading partners either eliminate or significantly reduce customs duties on the maximum number of goods traded between them. These agreements provide greater market access to Indian goods and services.

Russia is the top trading partner of India in the bloc, with bilateral trade worth $68.72 billion in 2024-25 (exports $4.88 billion and imports $63.84 billion). The high import numbers are because of jump in crude oil imports.

The bilateral trade with Armenia, Belarus, Kazakhstan, and Kyrgyzstan was $315.18 million, $106.69 million, $349.48 million, and $56.78 million, respectively, in the last fiscal.