India and EAEU Sign Terms of Reference to Begin Free Trade Agreement Negotiations

In a strategic move to strengthen its economic engagement with Eurasia, India and the Eurasian Economic Union (EAEU) have officially signed the Terms of Reference (ToR) to commence negotiations for a Free Trade Agreement (FTA). This development marks a significant step toward enhancing trade, investment, and institutional ties between India and the five-member bloc, which includes Armenia, Belarus, Kazakhstan, Kyrgyz Republic, and Russia.

The Signing of Terms of Reference

Key Officials and Location

The ToR was signed in Moscow by Ajay Bhadoo, Additional Secretary of the Department of Commerce, and Mikhail Cherekaev, Deputy Director of the Trade Policy Department, Eurasian Economic Commission.

The agreement sets the foundation and framework for the formal FTA negotiations, ensuring alignment on negotiating priorities and procedures from both sides.

What the FTA Means for India and EAEU

Trade and Economic Benefits

The Free Trade Agreement aims to,

• Boost exports from India to EAEU nations
• Support Micro, Small, and Medium Enterprises (MSMEs) by easing market access
• Diversify trade into non-traditional and emerging sectors
• Encourage investments in infrastructure, energy, pharma, and manufacturing
• Create a stable institutional framework for long-term trade cooperation

This FTA will be instrumental in tapping the untapped trade potential between the regions and expanding India’s economic footprint in the Eurasian zone.

Trade Performance and Outlook

Rising Bilateral Trade

India-EAEU trade reached USD 69 billion in 2024, recording a 7% growth over 2023. This upward trend reflects growing mutual interest and underscores the potential for deeper trade linkages.

With the FTA, this trade figure is expected to grow significantly, particularly in key sectors like pharmaceuticals, IT services, agriculture, textiles, and machinery.

Strategic and Geopolitical Relevance

Eurasia: A New Trade Frontier

The FTA negotiations come at a time when India is actively seeking new trade partnerships beyond the traditional Western markets. The EAEU offers access to a market of over 180 million people, energy resources, and strategic connectivity routes like the International North-South Transport Corridor (INSTC).

By enhancing economic ties with the EAEU, India not only expands its trade reach but also strengthens its geopolitical engagement in the Eurasian region amid changing global trade dynamics.