India and the Eurasian Economic Union have finalized the competition chapter in ongoing Free Trade Agreement talks. The deal aims to bridge a $59 billion trade deficit by easing non-tariff barriers for Indian exporters. Investors are tracking progress in sectors like pharmaceuticals, engineering, and chemicals as both sides aim for $100 billion in trade by 2030.
India and the Russia-led Eurasian Economic Union (EAEU) have achieved a notable breakthrough in their ongoing Free Trade Agreement (FTA) negotiations. During recent discussions in Russia, both sides successfully closed the competition chapter, while recording significant progress on rules governing small and medium enterprises and intellectual property rights. This advancement is a key step in formalizing an agreement that began in late 2025.
Targeting the Trade Imbalance
A primary driver behind these negotiations is the substantial trade gap between the two regions. Russia currently accounts for a large portion of India’s energy imports, primarily crude oil. However, India's exports to Russia stood at approximately $4.88 billion for the 2024-25 financial year, contributing to a total bilateral trade deficit of $59 billion. To address this, India is pushing for the removal of non-tariff barriers that currently hinder the shipment of high-value goods like electronics, automobiles, and electrical machinery.
Sectoral Hurdles and Export Opportunities
Indian exporters in sectors such as pharmaceuticals, marine products, and chemicals face specific regulatory challenges when entering EAEU markets. Pharmaceutical companies, for example, often navigate complex hurdles related to clinical trials, product registration, and price-setting mechanisms. Additionally, marine exporters have identified over 65 non-tariff barriers, including technical regulations and specific labelling requirements, that limit their market access. By addressing these through the FTA, India aims to simplify the compliance environment for domestic companies, potentially improving the competitiveness of Indian goods in the region.
Strategic Economic Goals
Beyond tariff reduction, the agreement is expected to cover a wide range of trade-facilitation measures, including customs administration, e-commerce, and sanitary standards. The two nations are also working toward deeper financial integration, with central bank-level discussions focused on a local currency settlement mechanism using the rupee and the rouble. This initiative is designed to reduce dependence on third-party currencies and streamline cross-border payments. Furthermore, a finalized labour mobility agreement signals a commitment to long-term economic cooperation, as the partners work toward an ambitious bilateral trade target of $100 billion by 2030.
Investors and market participants may continue to track the timeline for the final agreement, as well as specific updates on the resolution of non-tariff barriers for major export sectors. The next phases of negotiation will be critical to determine how quickly these regulatory changes can be implemented to support the growth of Indian engineering, pharma, and agricultural exports in Eurasian markets.