India, Russia-led EAEU may hold next round talks for trade pact in June

India and the Russia-led Eurasian Economic Union (EAEU) are scheduled to hold the next round of Free Trade Agreement (FTA) negotiations in June 2026 in Mosco...

What Happened

India and the Russia-led Eurasian Economic Union (EAEU) are scheduled to hold the next round of Free Trade Agreement (FTA) negotiations in June 2026 in Moscow, with discussions focused on non-tariff measures, regulatory alignment, and market access.
The two sides signed the Terms of Reference (ToR) for FTA negotiations in Moscow in August 2025, formally launching the negotiating framework.
The first round of substantive negotiations began in November 2025; the June 2026 round is the next scheduled iteration.
The talks aim to diversify India's export markets — India's exports to EAEU countries remain significantly lower than imports (particularly Russian crude oil and fertilisers), creating a structural trade imbalance that the FTA is intended to begin correcting.
The proposed pact covers a bloc with a combined GDP of approximately USD 6.5 trillion and a combined population of approximately 183.5 million.
India-EAEU bilateral trade reached USD 69 billion in 2024, a 7% increase over 2023, but India's exports constitute only a fraction of this total — heavily skewed toward Russian energy imports.
A Commerce Secretary-level review of negotiations took place in Moscow ahead of the June round to set the agenda and resolve procedural issues.

Static Topic Bridges

The Eurasian Economic Union: Structure, Members, and Purpose

The Eurasian Economic Union (EAEU) is a regional economic integration organisation established by the Treaty on the Eurasian Economic Union, which entered into force on January 1, 2015. It was conceived as a successor to the Customs Union of Belarus, Kazakhstan, and Russia (operational since 2010) and the Common Economic Space (2012). The EAEU aims to ensure free movement of goods, services, capital, and labour among member states and to pursue a coordinated macro-economic policy.

Member states (5): Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.
Founding trio: Russia, Belarus, Kazakhstan (Treaty signed May 2014).
Armenia joined effective January 2, 2015; Kyrgyzstan effective August 12, 2015.
Iran was designated an observer member in December 2024.
Governance structure: Supreme Eurasian Economic Council (heads of state — highest body), Eurasian Intergovernmental Council (heads of government — implements decisions), Eurasian Economic Commission (permanent supranational body — implements and enforces regulations).
Economic weight: Combined GDP approximately USD 2.585 trillion (nominal); covers 20.26 million km² (13.44% of world's habitable land); population ~183.5 million.
Russia dominates the bloc, with an economy approximately 10 times the size of the next largest member (Kazakhstan) in nominal GDP terms.
The EAEU has existing FTAs with China, Iran, Vietnam, Serbia, and Mongolia.

Connection to this news: Understanding EAEU's internal governance and economic asymmetry — with Russia as the dominant power — is essential to assessing the political dynamics of India-EAEU negotiations, where Moscow effectively sets the pace and priorities of the bloc's external trade policy.

India's Free Trade Agreement Strategy and the EAEU Rationale

India has actively pursued FTAs with multiple groupings in the 2020s, reflecting a strategic pivot from cautious trade liberalisation to actively using trade agreements as instruments of geopolitical diversification and export market expansion. India has concluded or is negotiating FTAs with the UAE (CEPA, 2022), Australia (ECTA, 2022), the United Kingdom (ongoing), and the European Union (concluded in principle, 2026). The EAEU FTA fits a distinct rationale: India's trade with Russia surged after 2022 to approximately $66 billion in FY 2024-25 — overwhelmingly driven by discounted Russian crude imports ($61.5 billion) — while Indian exports to Russia remain at approximately $4.5 billion. An FTA offers a framework to rebalance this relationship by improving market access for Indian manufactured goods, pharmaceuticals, textiles, and machinery.

India's FTA strategy under the Department of Commerce emphasises reciprocity, rules of origin discipline, and services trade — areas where India holds comparative advantage.
The EAEU negotiation focus on "non-tariff measures" (NTMs) — regulatory standards, certification requirements, sanitary and phytosanitary rules — reflects the reality that tariffs within the bloc are already low for many goods; real barriers are regulatory.
India has also flagged defence export potential through an EAEU agreement, aiming to leverage existing defence cooperation with Russia to expand sales to other EAEU members (particularly Kazakhstan and Armenia).
A PwC estimate suggests an India-EAEU FTA could add $15-20 billion to Indian exports annually, creating approximately 500,000 jobs in export-oriented sectors.

Connection to this news: The June 2026 round focusing on non-tariff measures signals that the negotiation has moved from the initial framework-setting phase to substantive technical discussions — a positive indicator of momentum toward an eventual agreement.

India-Russia Bilateral Trade: Structure and Imbalance

India-Russia bilateral trade reached approximately $66 billion in FY 2024-25, representing a 35% year-on-year increase driven predominantly by India's large-scale imports of discounted Russian crude oil following Western sanctions post-February 2022. Indian imports from Russia (approximately $61.5 billion) consist overwhelmingly of crude oil, fertilisers (especially potash and nitrogen-based), defence equipment, and nuclear fuel. Indian exports to Russia ($4.5 billion) include pharmaceuticals, engineering goods, electronics, and agricultural products. This 13:1 import-to-export ratio represents a structural vulnerability — India's energy security benefits from cheap Russian oil, but the trade relationship is neither balanced nor sustainable as a foundation for long-term strategic partnership.

Russia replaced Saudi Arabia and Iraq as India's top crude supplier in 2022-23; it has remained among the top two sources since.
Payments have been a significant bilateral friction point: US dollar and SWIFT system restrictions on Russian entities have forced settlements in rupees, UAE dirhams, and other currencies, creating reconciliation and convertibility challenges.
The rupee-rouble exchange rate mechanism for bilateral payments has been under continuous negotiation; accumulated rupee balances in Indian accounts at Russian banks have been difficult to deploy productively.
India's pharmaceutical exports to Russia (including to other EAEU members) are a strong area of competitive advantage; Indian generics have a large market share in Russia.

Connection to this news: The FTA negotiation is partly designed to create a structured, rules-based framework that can accommodate the settlement mechanisms, intellectual property standards, and market access norms needed for Indian exports to scale up — reducing the trade imbalance over time.

India's Export Diversification Imperative

India's merchandise export performance has been a recurring policy concern: exports stagnated around $330-430 billion for several years before recent upticks, constrained by global demand weakness, competition from China, and limited market access in key destinations. The government's strategic goal of achieving $2 trillion in merchandise exports by 2030 requires opening new markets systematically. The EAEU, with 183 million consumers and significant import demand across sectors where India has competitive supply, represents one such opportunity — particularly given that EAEU members' trade with China has raised strategic concerns within the bloc itself.

India's top merchandise export destinations historically: USA (~18%), UAE (~7%), China (~3-4%), Netherlands, Bangladesh — heavily concentrated in advanced economies.
EAEU countries collectively import significant volumes of pharmaceuticals, consumer goods, textiles, and machinery — all sectors where India has production capacity.
India's trade promotion bodies (EEPC India for engineering exports, Pharmexcil for pharmaceuticals, APEDA for agricultural products) have identified EAEU markets as priority diversification targets.
Geopolitical context: The US-China trade conflict and EU-China strategic competition have created openings for India to position itself as an alternative supplier to EAEU buyers seeking to reduce China dependency.

Connection to this news: The EAEU FTA is not purely a bilateral India-Russia affair — it potentially opens markets in Kazakhstan (Central Asia gateway), Armenia (entry to South Caucasus), and Belarus (Eastern European industrial economy) for Indian exporters who currently have minimal presence in these markets.

Key Facts & Data

EAEU established: January 1, 2015 (Treaty signed May 2014)
Member states: Russia, Belarus, Kazakhstan, Armenia, Kyrgyzstan
Observer: Iran (designated December 2024)
EAEU combined GDP: ~USD 2.585 trillion (nominal); USD 6.5 trillion (PPP-adjusted combined market)
EAEU population: ~183.5 million; area: 20.26 million km²
India-EAEU trade (2024): USD 69 billion (7% increase over 2023)
India-Russia trade FY24-25: ~$66 billion; imports $61.5 billion (crude, fertilisers, defence); exports ~$4.5 billion
Terms of Reference signed: August 20, 2025 (Moscow)
First negotiations round: November 2025
Next round: June 2026, Moscow
Focus of June round: Non-tariff measures, regulatory alignment, market access
Projected FTA benefit (PwC): $15-20 billion additional Indian exports annually; ~500,000 jobs
EAEU existing FTAs: China, Iran, Vietnam, Serbia, Mongolia
India's 2030 export target: USD 2 trillion in merchandise exports