After a recent meeting with the Russian President, Modi said an FTA with EAEU will boost economic cooperation
The trade agreement between India and the Russia-led Eurasian Economic Union (EAEU), negotiations for which are set to begin, will be a comprehensive one, and both the sides are keen on completing the talks soon. “The India-EAEU will be a comprehensive trade agreement which will cover goods, services and investment,” a source told FE. India’s trade with the EAEU region is barely $8.4 billion, considered well below potential. It is for this reason that India and the EAEU had decided to set up a joint feasibility study group on the India-EAEU FTA at the St Petersburg International Economic Forum (SPIEF) in 2015. This report has since been finalised and accepted by India and governments of the individual EAEU countries, following which negotiations on the FTA will be launched. “We are engaging very actively with the grouping and are hoping that the negotiations are done quickly,” the source added. At the end of bilateral talks between Prime Minister Narendra Modi and Russian President Vladimir Putin in St Petersburg, Modi said negotiations for an FTA with the EAEU would further strengthen economic cooperation. Both leaders also acknowledged the importance of developing economic cooperation at the regional level. A St Petersburg declaration by India and Russia, released at the end of bilateral talks between the two leaders, stated: “We will facilitate an early commencement of negotiations on a free trade agreement between the Eurasian Economic Union and the Republic of India.”
At a recent session in St Petersburg, Ramesh Abhishek, secretary, DIPP (ministry of commerce and industry) had said there was a need to promote connectivity between India and the EAEU region, and the International North South Transport Corridor would be extremely critical for this purpose.
The secretary also highlighted the role being played by the ‘Green Corridor’ in promoting trade facilitation between India and Russia. He felt that this corridor could be extended to the other EAEU countries in due course. Having come into force on January 1, 2015, the EAEU comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. India’s move to have an FTA with the EAEU assumes significance as a similar agreement with the European Union (EU) has failed to fructify despite 16 rounds of negotiations.
India and Russia have decided to coordinate efforts to promote settlements of Indian-Russian trade in national currencies to reduce dependence of our bilateral trade on other currencies. A joint statement by Modi and Putin had stated: “We will jointly encourage our business communities to use the existing workable schemes and mechanisms for settlements in national currencies elaborated by the Reserve Bank of India and the Bank of Russia.”