India is set to intensify discussions on a potential Free Trade Agreement (FTA) with the Russia-led Eurasian Economic Union (EAEU) during Russian President Vladimir Putin’s visit to New Delhi on December 4. Government sources indicate that India may also explore a separate services pact with Russia, as trade deals under the EAEU currently cover goods but not services.
India’s goods exports to Russia totaled $4.88 billion in FY25, while both nations aim to achieve $100 billion in bilateral trade by 2030. The proposed talks will initially focus on identifying sensitive sectors, discussion frequency, and areas where trade can be expanded, deliberately excluding gold and precious metals.
Focus on Key Export Sectors
To reduce its $59 billion trade deficit with Russia, India is targeting growth in exports of pharmaceuticals, chemicals, engineering goods, machinery, automotive, agriculture, and marine products.
Indian pharma exporters face four main challenges in the EAEU market:
- Registration process
- Clinical trials
- Market access
- Price registration
Similarly, over 65 non-tariff barriers have been flagged for marine exports, and India aims to negotiate their removal to facilitate trade expansion.
EAEU Overview and Ongoing Negotiations
The EAEU bloc includes Russia, Kazakhstan, Armenia, Belarus, and Kyrgyzstan, with Cuba, Moldova, and Uzbekistan as observers. India initiated FTA discussions with the bloc on November 26 in New Delhi, following the signing of the Terms of Reference (ToR) in Moscow on August 20.
Negotiations are expected to address issues such as:
- Customs administration
- E-commerce regulations
- Intellectual property rights (IPR)
- Sanitary and phytosanitary standards
- Tariffs and technical regulations
Officials from India’s Ministry of External Affairs (MEA) also noted ongoing talks between Indian and Russian central banks to set up a local currency settlement mechanism, and that an agreement on labour mobility between the two countries has been finalised, with formal signing processes underway.
Summary
India aims to boost exports of pharmaceuticals, marine products, and other goods to the EAEU to reduce its $59 billion trade deficit with Russia. Upcoming FTA talks during President Putin’s December 4 visit will focus on trade facilitation, removal of non-tariff barriers, and strengthening bilateral economic cooperation, while separate agreements on services and labour mobility are also in the pipeline.
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