India and Eurasian Economic Union Begin Path to FTA with ToR Signing in Moscow

India’s trade turnover with the EAEU reached USD 69 billion in 2024, representing a robust 7 percent increase compared to 2023.

In a significant step toward strengthening India’s trade and economic relations with the Eurasian region, India and the Eurasian Economic Union (EAEU) officially signed the Terms of Reference (ToR) to launch negotiations for a Free Trade Agreement (FTA). The signing took place in Moscow and marks the formal beginning of a structured dialogue that could reshape India’s trade architecture with a market of nearly 190 million people and a combined GDP of USD 6.5 trillion.

The ToR was signed by Shri Ajay Bhadoo, Additional Secretary, Department of Commerce, Government of India, and Mr. Mikhail Cherekaev, Deputy Director of the Trade Policy Department at the Eurasian Economic Commission (EEC). This milestone comes at a time when India has been actively diversifying its trade partnerships to secure access to new markets and reduce overdependence on traditional trade corridors.

High-Level Engagements in Moscow

During his Moscow visit, Shri Ajay Bhadoo also held discussions with Mr. Andrei Slepnev, Minister in charge of Trade at the EEC. Both sides highlighted the importance of the ToR in laying down the framework for the negotiation process, which will involve detailed discussions on tariff concessions, rules of origin, services trade, investments, and dispute settlement mechanisms. The heads of negotiation groups briefed the Minister on the progress made and discussed organizational steps to formally launch negotiations at the earliest.

Expanding Bilateral Trade Ties

India’s trade turnover with the EAEU reached USD 69 billion in 2024, representing a robust 7 percent increase compared to 2023. The upward trend demonstrates the growing complementarities between the Indian and Eurasian economies, particularly in energy, pharmaceuticals, machinery, information technology, and agricultural products. The proposed FTA is expected to further accelerate this growth by lowering barriers to trade, reducing transaction costs, and creating a predictable and transparent trade regime.

For India, the Eurasian region offers an opportunity to secure energy supplies, enhance connectivity to Central Asia, and access new consumer markets. For the EAEU, India provides a vast and dynamic market for industrial goods, agricultural exports, and technology collaborations.

Benefits for Indian Industry and MSMEs

The Free Trade Agreement, once concluded, is expected to bring significant benefits to Indian exporters and Micro, Small and Medium Enterprises (MSMEs). Lower tariffs and expanded market access will allow Indian firms to compete more effectively against global competitors, including non-market economies that currently dominate parts of the Eurasian market. Additionally, the agreement could open new sectors for Indian businesses, such as IT-enabled services, pharmaceuticals, textiles, engineering goods, and processed foods.

MSMEs, which form the backbone of India’s export ecosystem, stand to gain through improved access to regional value chains and investment partnerships. This would not only diversify India’s export basket but also reduce vulnerability to supply chain disruptions.

Strategic Significance of the Agreement

The FTA negotiations come at a time of shifting global trade dynamics, where regional blocs are gaining prominence in shaping the flow of goods, services, and capital. The EAEU—which includes Armenia, Belarus, Kazakhstan, Kyrgyz Republic, and the Russian Federation—has been actively seeking to expand trade partnerships with Asia, while India has been intensifying its engagement with Eurasia as part of its “Act East and Connect Central Asia” policies.

By establishing a structured and durable institutional framework for trade, the India–EAEU FTA could also serve as a catalyst for broader connectivity projects, including transport corridors and energy pipelines. Such cooperation would enhance resilience, economic diversification, and long-term stability in the region.

Looking Ahead

Both India and the EAEU reaffirmed their commitment to fast-tracking the negotiation process and reaching an early conclusion. The ToR is not just a procedural document—it is a roadmap that will guide negotiators toward a comprehensive and mutually beneficial agreement.

If successfully concluded, the FTA would stand as a landmark development in India’s trade diplomacy, unlocking untapped trade potential, fostering investment flows, and cementing India–EAEU ties as a key pillar of Eurasian economic integration.