FTA with EAEU

Why in News?

India and the Eurasian Economic Union (EAEU) have signed the Terms of Reference (ToR) to begin negotiations for a Free Trade Agreement (FTA). This step is significant as it comes at a time when the U.S. is pressuring India to reduce its economic ties with Russia.

What is EAEU?

Eurasian Economic Union (EAEU):

• A regional economic union established in 2015.
• Members: Russia, Armenia, Belarus, Kazakhstan, Kyrgyz Republic.
• Objectives:
• Promote economic integration.
• Ensure free movement of goods, services, capital, and labor.
• Coordinate policies in energy, industry, agriculture, and transport.
• Headquarters: Moscow, Russia.

 The News

India and EAEU signed the ToR to launch FTA negotiations.

• Agreement signed by Ajay Bhadoo (Addl. Secy., Dept. of Commerce, GoI) and Mikhail Cherekaev (Dep. Dir., Trade Policy Dept., Eurasian Economic Commission).
• Current trade turnover between India and EAEU: $69 billion in 2024, a 7% increase over 2023.
• Combined GDP of EAEU region: $6.5 trillion.

 Analysis

• Strategic Importance:
• Enhances India’s engagement with Eurasia, a resource-rich and strategically located region.
• Counters U.S. pressure by diversifying trade partners while maintaining ties with Russia.
• Economic Gains:
• FTA can reduce tariffs, increasing India’s exports in pharma, IT, textiles, agriculture, and engineering goods.
• Provides access to energy resources (oil, gas, uranium) from Russia and Central Asia.
• Geopolitical Dimension:
• Strengthens India’s position in Eurasia, balancing China’s influence through BRI.
• Helps India expand connectivity via INSTC (International North-South Transport Corridor).
• Challenges:
• U.S. sanctions pressure and secondary sanctions risk.
• Limited logistics and connectivity infrastructure.
• Regulatory barriers within EAEU nations.

UPSC PRELIMS MCQ :

Question: With reference to the Eurasian Economic Union (EAEU), consider the following statements: 

 1. The EAEU was established in 2015 to promote regional economic integration. 

 2. Its members include Russia, Armenia, Belarus, Kazakhstan, and Kyrgyz Republic.

 3. The headquarters of the EAEU is located in Minsk, Belarus. 

 4. India has recently signed the Terms of Reference (ToR) with the EAEU to begin negotiations for a Free Trade Agreement (FTA). Which of the statements given above are correct?

Options: A. 1 and 2 only
B. 1, 2 and 4 only
C. 2, 3 and 4 only
D. 1, 2, 3 and 4 

  Answer: B. 1, 2 and 4 only

• Statement 1 ✅ Correct – EAEU was established in 2015.
• Statement 2 ✅ Correct – Russia, Armenia, Belarus, Kazakhstan, Kyrgyz Republic are members.
• Statement 3 ❌ Incorrect – Headquarters is in Moscow, Russia, not Minsk.
• Statement 4 ✅ Correct – India signed ToR for FTA talks in August 2025.