The Eurasia gamble: Delhi's high-speed FTA chase

An ambitious pact with Moscow's bloc could cut tariffs, boost exports from Armenia to Kyrgyzstan, and ease India's dependence on oil imports — but risks inflaming tensions with the West and tying trade to fragile geopolitics

- SHREYA NANDI

Last week, an image of Prime Minister Narendra Modi and Russian President Vladimir Putin sharing a car ride to their bilateral meeting in Tianjin, China, on the sidelines of the Shanghai Cooperation Organisation summit, captured global attention.

The meeting signalled a deepening of India's strategic relationship with Russia, despite pressure from the West, particularly the US and the European Union. Prioritising economic ties, India and the Russia-led Eurasian Economic Union (EAEU) last month finalised a framework to launch free trade agreement (FTA) talks. Both sides aim to conclude negotiations within 18 months, with the possibility of an earlier conclusion depending on the pace and convergence of discussions.

Inside the Eurasian bloc: Why India can't ignore it The EAEU is an economic union of five post-Soviet states — Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia — with an integrated single market that came into force in 2015. Russia is the largest country and the bloc's biggest trading partner, accounting for over 92 per cent of the EAEU's total trade with India.

A trade deal with the EAEU has been under discussion for several years. Both sides had agreed to hold initial talks in March 2020 in Moscow to set the agenda and finalise the structure of the joint text. The plan was shelved due to the Covid-19 pandemic.

Talks gained momentum once the pandemic receded, with fresh interest from Russia in 2022 after Western sanctions sought to isolate it over the Ukraine conflict. Since then, India and the EAEU have worked to finalise the broad framework, or terms of reference (ToR), but it was only last month that discussions were expedited.