India has asked its domestic industries to compile a list of products from sectors where the country is working towards self-sufficiency. These are the sectors where India has reservations about offering tariff concessions as part of the proposed free trade agreement (FTA) negotiations with the five-member Eurasian Economic Union (EAEU).
India is preparing for potential free trade agreement (FTA) negotiations with the Eurasian Economic Union (EAEU), which comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. As part of this process, the Indian government has asked domestic industries to identify products from sectors where India is pursuing self-reliance, and where it has reservations about offering tariff concessions.
According to government sources, engineering goods, electronics, and agriculture are expected to benefit from the potential EAEU-India FTA. The authorities have requested industry to highlight any restrictions they face in the EAEU markets.
"The two sides have met and discussed initiating formal talks for the pact," a government official stated, adding that in light of this development, input has been sought from industry on barriers and products where India aims to achieve self-sufficiency.
New Delhi's concerns stem from the significant trade imbalance - India's exports to the EAEU in April-January 2023-24 were $3.7 billion, while imports were $51.7 billion, primarily due to crude oil imports from Russia. Furthermore, the EAEU has already signed FTAs with China, Vietnam, Serbia, and Iran, which could impact the competitiveness of Indian industries in EAEU markets.
A joint feasibility study estimates India's export potential to the EAEU at $14-24 billion. However, an industry representative highlighted that "there are certain products with low-negotiation prospects where we have concerns on giving market access," citing dairy and agricultural products as examples of sensitive issues in many FTAs.
India's top exports to the EAEU include medicines, telephones, shrimp, auto components, and steel, while its top imports are coal, petroleum, diamonds, fertilizers, and metals. Russia is India's largest trading partner within the EAEU.
The government has also asked industry to provide details on tariff and non-tariff barriers they face in the EAEU, as well as products where they hope to expand exports and the concessions they would seek from the EAEU. Experts advise that India should be prudent in negotiating the rules of origin as part of the FTA talks, to ensure that the agreement does not inadvertently facilitate the entry of competitively-priced imports from other markets into the EAEU region.
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