The Eurasian Economic Union comprises Russia, Belarus, Armenia, Kazakhstan and Kyrgyzstan. The FTA is expected to open up a huge market with a trade potential of US$ 37 to 60 billion and the present trade between India and the five Eurasian countries stands at $ 11 billion. India has got bilateral relations with all these countries but the agreement with EAEU will facilitate trade and investment in these countries in a big way and the Indian officials hope to achieve a trade turnover at $ 30 billion with these five countries by 2025 and $ 15 billion investment.

According to EAEU sources, the Eurasian Union is planning to create a network of free trade areas (FTAs). The New Zealand FTA project was abandoned in 2014 in the aftermath of the fallout with the West. The first success story is the Vietnam FTA, which was ratified in November 2015. In 2016, the process gained momentum. It was not in vain that Kazakhstan’s president proposed 2016 as the year of EAEU foreign economic policy.

EAEU experts mention that global trade rules are experiencing tectonic changes, which are very often prejudiced against EAEU countries. It should be admitted that today the EAEU — with its GDP of $2 trillion and a population of 182 million people (including 93 million gainfully employed people) — is not a self-sufficient market. It accounts for just 3.2% of global GDP.

EAEU is aiming at building up a network of free trade areas similar to the EAEU–Vietnam arrangement. Work is underway to negotiate FTA agreements between the EAEU and Israel, Serbia, and Singapore. Other potential partners include India, South Korea, Chile, Thailand, South Africa, and Iran.

The EAEU’s objective is to eventually negotiate a comprehensive treaty with its largest trade and economic partners — the EU and China. Long-term sustainable development is only possible if it relies on close cooperation with both the European Union and China. There has already been some progress in that direction. The EAEU and China have started a dialog on a Trade and Economic Cooperation Agreement. The Eurasian Commission was granted the necessary legal mandate in June 2016.

Discussions are underway regarding EAEU involvement in China’s new strategic concept — the Silk Road Economic Belt. The prospects of mutually beneficial cooperation between the EAEU and China certainly give a powerful impetus to regional development and ongoing interaction with respect to transport, energy, and finance in Central Asia, Siberia, and the Far East

There has been more interest in economic cooperation and integration between the EU and the EAEU. Deep economic integration with the EU is extremely important for the Eurasian Union. First, the EU is the largest trade partner for Russia and Kazakhstan: more than one half of the Russian Federation’s trade volume is attributable to the EU; and Russia, in turn, is the European Union’s third largest trade partner. Second, the EU could play the decisive role in modernizing the countries in the Eurasian integration project.

As regards India, the scope for expansion of trade and investment to the Eurasian Economic Union Countries is huge. A state like Kerala can be benefitted immensely through the exports of traditional products like spices, marine goods, coir and rubber. Apart there are opportunities for medical tourism from the EAEU countries. The Indian officials have worked out the road map in the feasibility study prepared by the Joint Feasibility Study Group and the report has got approval from both sides. Once the clearance comes from the St. Petersburg summit, formal negotiations for the FTA will start from July this year itself.

EAEU sources point out that there has been some progress in eliminating the exemptions stipulated by the EAEU Treaty. Preparations are underway to establish a single power market. A corresponding international treaty will be prepared after the EEC has approved the conceptual framework for the single power market. According to the current schedule, the market will be launched in 2019. The details are still under discussion. The barebones option is a common spot market combined with cross-border power exchange mechanisms
.
EAEU member states are beginning consultations on a very complex matter— creation of an EAEU financial regulator by 2022–2025, a supranational financial institution that would be responsible for enforcing common standards in the Union’s financial markets and for providing proper regulation and supervision. No issues related to a single central bank or single currency have been officially raised to date.

A single market for oil, gas, and petroleum products is expected to emerge by 2025. The distant deadline is due to the oil and gas sector’s extraordinarily important role as the source of national budget revenues. The work will proceed separately (for oil and gas) under two programs and according to two roadmaps.

The efforts related to the finalization of the Customs Code and the creation of common pharmaceutical, power, oil, and gas markets and a single financial regulator represent components of the same process — elimination of exemptions from the EAEU Common Market. It will be a tortuous and time consuming process but the members are hopeful of an agreement (IPA Service)