Expansion of Eurasian Economic Union a new opportunity for India

The Dollar Business Bureau

The Prime Minister, Shri Narendra Modi meeting the President, Shri Pranab Mukherjee on the occasion of his ceremonial departure for the State Visit to Sweden and Belarus, at Rashtrapati Bhavan, in New Delhi on May 31, 2015. Source: PIB. Government of India.

  The expansion of Eurasian Economic Union (EEU) has the potential to open new trade avenues for India and other countries in the Southeast Asia. The new economic bloc came into force in January this year, after an agreement between Russia, Belarus, and Kazakhstan. Later, Armenia joined the forum, while Kyrgyzstan is in the process of becoming a member of this group. Strategic and trade analysts say that the new forum could be an effort by Russia to link Central and Southeast Asian countries and set up a group parallel to the European Union. Last week, Vietnam has signed a Free Trade Agreement (FTA) with the EEU. The move is considered as the first step towards the development of a free trade zone with the help of a country which is not a member of EEU. Analysts say that the process is expected to continue and would cover India, New Zealand, Turkey, Israel and many other countries in the next few years. Describing the FTA with Vietnam as a milestone, Russian Prime Minister Dmitry Medvedev said, that around 40 countries have expressed willingness to discuss similar trade agreements with EEU, a report said. President Pranab Mukherjee is expected to visit Belarus this week, while Prime Minister Narendra Modi will tour Russia and Central Asia next month. And analysts believe that the discussion over India’s inclusion in EEU will be on top of the agenda, especially after the EEU-Vietnam agreement. Considering the FTA with Vietnam as an example, India is also assessing benefits of such collaborations; a report said citing government officials. According to estimates, Vietnamese firms can add up to $10 million to their profit, while exporters from member countries of EEU will be able to save at least $40 million in a year. Experts are of the opinion that Modi's visit will explore ways to tap the natural resources of Central Asia and strive for India’s greater access to the regional market. In fact, India, which has already been engaged in the oil business in Vietnam and Kazakhstan, can take advantage of its strategic position in the region and bargain for more liberal cross-border trade with EEU partners.      

June 01, 2015 | 8:00 pm IST.