Moving swiftly on its decision to consider a free trade agreement with the newly formed Russia-led Eurasian Economic Union (EEU), India has initiated the process of setting up a Joint Study Group (JSG) to study its feasibility.
- An FTA with EEU makes both economic and strategic sense for India.
- India hopes to make strong gains in areas such as pharmaceuticals, textiles, agriculture and energy as well as attract investments in its infrastructure sector.
- Established on January 1 this year, the EEU—an economic union that includes Belarus, Kyrgyzstan, Kazakhstan, Russian Federation and Armenia—offers a lucrative market with a joint population size of 180 million and a GDP of an estimated $4 trillion.
- The JSG, which will have officials from both India and the EEU, will jointly look at the areas that a FTA, officially known as a Comprehensive Economic Partnership Agreement (CEPA), could cover, and whether it would be beneficial for both sides.
- An agreement to work on a JSG was reached between India and Russia last month.
- India is actively looking at establishing strong economic and trade relationship with countries other than the US and the EU, which are its traditional partners.
- The EEU provides an excellent opportunity to diversify Indian market base and reduce our dependence on just a few nations.
- India had a close relationship with the erstwhile Soviet Union, and now that Russia is trying to build another economic union with former members, India wants to re-establish earlier ties with the region.
- India was already working on a CEPA with Russia and the Customs Union of Belarus and Kazakhstan.
- The formation of the EEU has widened the canvas of the proposed pact with the region.
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