Whalesbook
Boosting Indian Exports
India will continue pursuing a comprehensive Free Trade Agreement (FTA) with the Russia-led Eurasian Economic Union (EAEU). The next round of talks is scheduled for June 2026 in Moscow. This strategic push aims to diversify India's export markets, a key goal made more important by global economic uncertainties and lingering US tariffs. The negotiations will build on the Terms of Reference signed in August 2025, focusing on expanding market access for Indian businesses, including MSMEs, farmers, and fishermen, as part of an eighteen-month plan. The ambitious goal is to raise bilateral trade to $100 billion by 2030.
Bridging the Trade Gap
The trade imbalance between India and Russia is a major concern, reaching about $59 billion in fiscal year 2025. India's exports to Russia, valued at around $4.88 billion in FY25, are far less than imports. These imports are mainly crude oil, which hit $63.84 billion in the same period. India could significantly boost its merchandise exports to Russia, especially in food, pharmaceuticals, textiles, and machinery, but this requires fixing structural issues. The current trade is heavily skewed towards energy imports, with crude oil making up about 80% of Russia's exports to India.
A Complex Global Scene
The India-EAEU FTA negotiations are happening in a complex geopolitical and economic situation. Global trade patterns are changing due to sanctions on Russia, leading to more commerce between Russia and countries like China, which saw trade jump to $245 billion in 2024. India is also diversifying beyond traditional partners, recently signing a major FTA with the EU in January 2026. The EAEU, a bloc made up of Russia, Kazakhstan, Armenia, Belarus, and Kyrgyzstan, offers access to a market with a combined GDP of about $6.5 trillion. However, the EAEU's structure as a customs union limits its ability to include services trade agreements, which India wants but the bloc usually excludes. India has signed FTAs before with Iran, Vietnam, Singapore, and Serbia. The long-standing India-Russia relationship has seen trade grow significantly, especially post-2022 due to discounted energy imports, though this has worsened the trade imbalance.
Key Roadblocks Ahead
Despite optimistic targets, major obstacles challenge the quick progress of a balanced trade pact. India has identified over 65 non-tariff barriers (NTBs) affecting its exports, mainly in marine and agricultural products, but also in electronics, automotive, and pharmaceuticals. These barriers include complicated registration processes, market access limits, and overlapping regulations with Russian and European standards. Russia's willingness to remove these measures is a key question, particularly as its economy adapts to sanctions. The EAEU's customs union structure means services and investment sections are likely to be excluded from the main goods FTA, requiring separate deals. India's cautious approach, reportedly leaving out sensitive sectors like gold and precious metals from early talks, suggests a practical but potentially slower approach to full liberalization. The geopolitical situation, with Western nations watching India's trade ties with Russia closely, adds complexity and could draw attention from partners like the US.
Path Forward
The main focus is on resolving non-tariff issues and moving forward the goods FTA. Discussions are also advancing on a plan to settle trade in local currencies and a finalized agreement on worker movement between India and Russia. These developments, alongside the current FTA talks, show a commitment to deepening economic ties. However, the ambitious $100 billion trade target depends on effectively overcoming the structural challenges, the deep-rooted trade deficit, and Russia's commitment to reducing non-tariff barriers across key Indian export sectors.