India One Step Closer To Sign Free Trade Agreement With The Eurasian Economic Union

Earlier this year on March 1, EMerging Equity reported in details that India proposed creating a free trade zone with the Eurasian Economic Union (EEU). We are three months later in June and the EEU and India have started negotiations over the free trade zone agreement and signed a framework agreement at the International Economic Forum in St. Petersburg. 

The union’s member states account for about 15% of the world’s land mass, covering over 20 million square kilometers. Source: Wikipedia

“The two regions are big, anything done together should naturally lead to bigger outcomes,” said Indian Minister of State for Commerce Nirmala Sitharaman according to RT.

Moreover, the Eurasian Economic Commission (EEC) Trade minister Andrei Slepnev said the country was ready for a similar deal with Iran soon.

“I think that in general this whole complex of measures forms a clear picture of our priorities for cooperation with partners in the Asian region, which now have the highest growth rate, and generally support the global economy,” Slepnev added.

On May 29 Vietnam became the first country to sign a free trade agreement with the EEU. Russian Prime Minister Dmitry Medvedev then said that around 40 countries were holding talks on some kind of agreement with the union, RT reported.

*) What is the EEU?

“The Eurasian Economic Union (EAEU or EEU) is an economic union of states located primarily in northern Eurasia. A treaty aiming for the establishment of the EEU was signed on 29 May 2014 by the leaders of Belarus, Kazakhstan and Russia, and came into force on 1 January 2015. Treaties aiming for Armenia’s and Kyrgyzstan’s accession to the Eurasian Economic Union were signed on 9 October 2014 and 23 December, respectively. Armenia’s accession treaty came into force on 2 January 2015. Although Kyrgyzstan’s accession treaty will not come into force until May 2015, provided it has been ratified,^[15] it will participate in the EEU from the day of its establishment as an acceding state.

In 1994, President of Kazakhstan Nursultan Nazarbayev first suggested the idea of creating a regional trading bloc during a speech at Moscow State University. Numerous treaties were subsequently signed to establish the trading bloc gradually. Many politicians, philosophers and political scientists have since called for further integration towards a political, military and cultural union. However, modern-day Kazakhstan has insisted the union stay purely economic as it seeks to keep its independence and sovereignty intact.

The Eurasian Economic Union has an integrated single market of 176 million people and a gross domestic product of over 4 trillion U.S. dollars (PPP). The EEU introduces the free movement of goods, capital, services and people and provides for common transport, agriculture and energy policies, with provisions for a single currency and greater integration in the future. The union operates through supranational and intergovernmental institutions. The supranational institutions are the Eurasian Commission (the executive body), the Court of the EEU (the judicial body) and the Eurasian Development Bank. National governments are usually represented by the Eurasian Commission’s Council. In addition, all member states participate in the Collective Security Treaty Organization, an intergovernmental mutual defense alliance,” Wikipedia says.