The Eurasian Economic Union (EAEU), India and Russia-Nediced, started negotiations for a free trade agreement (FTA) on Wednesday. This step has come at a time when trade talks with America were broken. US President Donald Trump called India “Dead Economy (Dead Economy)” and increased fees on Indian products to 50%, the highest in the world.
India’s inclination towards Russia-China-Brazil
Due to the rigorous economic policies of America, India has now started moving towards China, Russia and Brazil. After the breakdown of American talks, Prime Minister Narendra Modi has interacted with Brazilian President Lula Da Silva and Russian President Vladimir Putin and are expected to meet Chinese President Xi Jinping soon.
Importance of agreement with EAEU
EAEU includes Russia, Armenia, Belarus, Kazakhstan and Kyrgyz Republic. The total GDP of this group is around 6.5 trillion dollars. These talks came to a standstill since the Ukraine War began in 2022. The FTA talks (TOR) were signed in Moscow on Wednesday. The agreement was signed by India Additional Secretary of the Ministry of Commerce Ajay Bhadu and EAEU on behalf of EAEU. The ministry said that this FTA will open new markets, increase investment and MSME sector will benefit greatly.
India – EAEU business
In 2024, India – EAEU trade stood at $ 69 billion, which is 7% higher than 2023.
Russia now fulfills 35–40% of India’s total crude oil imports (this share was only 2% in 2019).
But India’s exports to Russia have increased from only $ 2.39 billion (FY19) to $ 4.88 billion (FY25), while the trade deficit has exceeded $ 60 billion.
In order to create balance, India has intensified efforts to resume the rupee-rubble trade.
American pressure and challenges for India
The fee from 25% to 50% imposed by the US has made a profound impact on India’s exports.
Kotak Report: Exports up to $ $ 0-35 billion annually to India may be loss. If the fee goes up to 50%, the export of $ 55 billion will come at risk.
CRISIL Report: Most of the exports from India (such as readymade garments, chemical, agro-chemical, capital goods, solar panels) will become impractical if the additional 25% fee is implemented from 27 August 2025.
India’s strategy
Instead of America, India is now emphasizing business partnership with Russia, China and Brazil.
Russia can become a large market for textile and pharmaceuticals for India.
The government’s focus is on diversification of export markets and reducing dollar dependence.
