News Excerpt:
Indian officials and the representatives of the Eurasian Economic Union (EEU) held extensive talks last month to begin formal negotiations on a free trade agreement (FTA).
More about the news:
- Two feasibility studies have already been conducted on the proposed agreement.
- In such agreements, two or more trading partners either eliminate or significantly reduce customs duties on the maximum number of goods traded between them.
- The proposed FTA will provide greater market access to Indian goods and services in the EEU countries.
Eurasian Economic Union (EEU):
- The Eurasian Economic Union consists of five member states: Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia.
- The treaty establishing the EEU was signed on 29 May 2014 in Astana (now Nur-Sultan) and came into force on 1 January 2015.
- It is an ambitious project for economic integration in the former Soviet region. Its formal objectives are to create a common market much like the European Union (EU).
- It aims to achieve this by coordinating economic policy, eliminating non-tariff trade barriers, harmonizing regulations, and modernizing the economies of its five member states.
- The EEU has its own institutions, mirroring that of the EU. These include the Eurasian Economic Commission in Moscow as its regulatory body, and a Court of the Eurasian Economic Union based in Minsk, Belarus.
India and the EEU trade relations:
- India has a long political and economic history of cooperation with Russia and the Soviet Union.
- In the EEU bloc, Russia is India’s top trading partner with a bilateral trade worth USD 49.4 billion in fiscal year 2023 (FY23).
- India's exports to Russia stood at USD 3.14 billion in 2022-23, while imports were at USD 46.2 billion due to an increase in crude oil imports.
- The bilateral trade with Armenia, Belarus, Kazakhstan, and Kyrgyzstan was at USD 134.26 million, USD 111.81 million, USD 641.62 million, and USD 56.56 million, respectively, in fiscal year 2022-23.
Significance of India-EEU FTA:
- Indian exporters from sectors such as engineering goods, electronics, and agriculture may get an edge from the India-EEU FTA.
- 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.
- A similar free trade agreement was signed by India and the European Free Trade Association (EFTA). The members of this bloc are Iceland, Liechtenstein, Norway, and Switzerland.
