Eurasian Economic Union (EAEU)
Why in news?
India and the Eurasian Economic Union (EAEU) are set to launch formal negotiations for a Free Trade Agreement (FTA) starting November 2025.
About Eurasian Economic Union (EAEU)
- The EAEU is an economic union of five post-Soviet states located in Eurasia: Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.
- It was established by the Treaty on the Eurasian Economic Union signed on May 29, 2014, and came into force on January 1, 2015.
- The union aims to create an integrated single market with free movement of goods, services, capital, and labor among member states.
Significance of EAEU India FTA
- Market Access: The FTA gives India access to the EAEU's large market with a combined GDP of around USD 6.5 trillion, opening new export opportunities in textiles, pharmaceuticals, engineering goods, electronics, and agriculture sectors.
- Trade Diversification: The FTA helps India reduce dependence on traditional markets like the US and EU, especially amid tariff tensions and trade restrictions.
- Support for MSMEs: The agreement is expected to boost Micro, Small and Medium Enterprises by facilitating easier market entry and reducing trade barriers, broadening economic participation.
- Energy Security: EAEU countries, particularly Russia, are key suppliers of energy resources to India (Russia supplies about 35-40% of India’s crude oil imports). The FTA would strengthen long-term energy cooperation and secure stable energy supplies.
- Trade Growth Potential: Bilateral trade between India and the EAEU reached about USD 69 billion in 2024, with potential for significant expansion under the FTA framework.
- Geopolitical and Strategic Importance: The partnership aligns with India’s strategic goals to strengthen ties with Eurasian neighbors and counters geopolitical pressures.
- Connectivity Benefits: The FTA complements infrastructure projects like the International North-South Transport Corridor (INSTC) and Chennai-Vladivostok corridor, which could lower logistics costs and shorten transit times.
The FTA is expected to unlock untapped trade potential, improve market integration, and establish a durable economic partnership between India and the EAEU states.
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