India, Eurasian Economic Union sign terms to launch trade negotiations

Russia dominates grouping with more than 92% share in India's trade

India and the Eurasian Economic Union (EEU), comprising Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan, on Wednesday signed the terms of reference (ToR) to launch negotiations on a free trade agreement (FTA).

 

Russia, the largest member of the EEU bloc, is also India’s biggest trading partner within it, accounting for more than 92 per cent of total trade.

 

The announcement comes amid strained relations between India and the US, with Washington turning up the pressure on New Delhi by imposing additional import tariffs. The move is aimed at curbing India’s trade, particularly oil imports, with Russia. The new tariffs, set to take effect next week, are seen as America’s attempt to tighten the screws on Moscow and hasten an end to the three-year-long Russia–Ukraine conflict. 

 

FTA talks with the EEU are also being launched at a time when India has been unable to finalise an interim trade deal with the US. Uncertainty hangs over the next round of negotiations after US President Donald Trump doubled tariffs on Indian goods to 50 per cent, including an extra 25 per cent duty on India’s imports of Russian crude. 

The ToR was signed by Ajay Bhadoo, additional secretary in the Department of Commerce, and Mikhail Cherekaev, deputy director of the Eurasian Economic Commission’s trade policy department. Both sides also discussed the next steps to formally launch the process, including organisational aspects of the proposed trade pact.

 

Trade between India and the EEU stood at $69 billion in 2024, up 7 per cent from a year earlier. Discussions on an FTA have been underway for more than two years.

 

“With a combined gross domestic product of $6.5 trillion, the proposed 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 wide benefits to micro, small and medium enterprises,” the commerce department said.

 

The ToR sets the framework for negotiations and is expected to unlock untapped trade potential, increase investment flows, and establish a stronger India–EEU economic partnership. Both sides reaffirmed their commitment to an early conclusion of the agreement and to building a long-term institutional framework for trade cooperation.

 

Last year, India and Russia set an ambitious target of raising bilateral trade to $100 billion by 2030, up from the current level of more than $65 billion.