Prime Minister Narendra Modi and Russian President Vladimir Putin are expected to come out with a joint statement, announcing the launch of the India-Eurasian Economic Union (EEAU) talks at a summit-level meeting to be held in St Petersburg on June 1, a senior commerce ministry official said. EEAU comprises five countries — Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan.
Earlier, a feasibility study predicted that an operational FTA between India and EEAU member countries would help increase India’s exports to EEAU by $14-24 billion from the 2016 level of $1.7 billion. India’s exports of processed food, tea, pharmaceuticals, textiles, chemicals, fertilisers, electrical equipment and machinery etc to the EEAU countries is likely to significantly increase if the pact is signed. Both sides are keen to wrap up the FTA negotiations as early as possible, the official said.
Several initiatives were undertaken by India that are expected to ramp up bilateral trade between India and Russia, which in turn will have a positive bearing on India’s trade with other central Asian countries too, the official said.
It is expected that the International North-South Transport Corridor (INSTC) route via Bandar Abbas port in Iran to Russia and other central Asian countries would cut the transportation time and hence, the cost of trade between India and EEAU.
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It took half the usual transit time of 44 days for five containers of electrical transformers from Bengaluru to reach St Peterburg via the INSTC route recently, when a pilot shipment was undertaken. The time could be reduced further to 19 days if some procedures are streamlined.
It is expected that this route could be used to transport Indian exports not only to Russia, but also to adjoining central Asian countries like Kazakhstan and Kyrgyzstan using multi-modal transport routes i.e. by road, rail and the Caspian Sea. India and Russia are in the process of setting up a ‘Green Corridor’ which will enable registered exporters from both the countries to send their consignments in a seamless manner.
Details of the exporters would be recorded in computer terminals in India and Russia that would be interconnected, and processing of export-import orders and payments would be fully automated. So, the transport of Indian exports to Russia and central Asian countries is expected to be much easier and cheaper in the near future, the official said.