India Starts Free Trade Negotiations with the Eurasian Economic Union

Posted by

CDE Op-Ed Commentary

The Eurasian Economic Union and India will sign a deal this Saturday, paving the way for negotiations on a future free trade zone agreement, the Chairman of the Eurasian Economic Commission’s Board Tigran Sarkisyan has said.

Speaking on the sidelines of the St. Petersburg International Economic Forum, Sarkisyan stated, “We announce the start of a negotiation process with an eye on signing a free trade zone pact. Two ministers – the trade ministers of Russia and India – will sign a document on the issue.”

Sarkisyan said he met with Indian Prime Minister Narendra Modi in St. Petersburg. “We discussed trade and economic relations between the Eurasian Economic Union and India. We noted with satisfaction that both sides are interested in signing a treaty of this kind, and the results of a research into the issue demonstrate that it will be a win-win situation for India and the EAEU. We agreed that work should continue to make us prepared for signing this treaty.”

The EAEU is a Free Trade Bloc that includes Armenia, Belarus, Kazakhstan, Krygyzstan, and Russia. It essentially extends from the borders of China to the borders of the European Union.

EAEU map

 

Connections between India and Russia are improving, although bilateral trade remains low. However, the International North-South Transportation Corridor connects India to Russia via Iran, which is in the process of concluding its own Free Trade Agreement with the EAEU

Nevertheless, Russian-Indian bilateral trade is moving upwards. Notably, Indian companies in the jewelry sector have expressed interest in the Eurasian Diamond Exchange, which has just opened in Vladivostok. The KGK Group, India’s largest diamond merchants, are spending US$25 million on establishing a facility there. Further, Indian pharmaceutical companies should note that the EAEU has just regulated its common pharmaceutical market, which could have immense significance for Indian access to the EAEU – should the Free Trade Agreement (FTA) reach a conclusion. 

Thus far, numerous countries, including China, have expressed interest in an EAEU FTA, while Vietnam has ratified such a deal. That has been a boom for both sides; Russia has invested some US$10 billion into Vietnamese projects and Russian exports to Vietnam have risen sharply since the FTA came into effect in early 2016. 

EAEU Free trade potential vietnam example

 

“New Asian trade routes are being established throughout Eurasia”, says Chris Devonshire-Ellis of Dezan Shira & Associates “and India and Russia are no exception to this. The two countries are old friends and although bilateral trade is relatively low, this also means the growth potential is huge, and it is not a crowded market. Russian entrepreneurs should be looking at India and its huge consumer market and competitive manufacturing environment, while India’s entrepreneurs should be examining Russia, and especially trade, e-commerce, and logistics in using Russia as a stepping stone to the EU and China. There are plenty of opportunities in this newly opening trade corridor.”    

 

About Us

Dezan Shira & Associates provides foreign businesses with strategic, legal, tax, and operational advisory services to SMEs and MNCs investing throughout India, and has offices in Delhi and Mumbai, as well as St. Petersburg and Moscow. The firm also assists Indian investors in Russia.

Please contact our India offices at india@dezshira.com, our Russia Desk at russia@dezshira.com, or visit the practice at www.dezshira.com

 
Related-Readings_IB-icons_2017Related Reading:

dsa brochure

Dezan Shira & Associates Brochure

Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.


2017-18 Tax Guide Thumbnail for Related Sources

Tax, Accounting and Audit in India 2017-18

The third edition of Tax, Accounting and Audit in India is updated for 2017, and provides an overview of the fundamentals of India’s tax, accounting, and audit regime. The guide also includes a detailed introduction of the Goods and Services Tax (GST) that was launched on July 1, 2017, representing the complete transformation of India’s indirect taxation structure. 


Payroll processing and compliance in India

Payroll Processing and Compliance in India

In this issue of India Briefing Magazine, we discuss payroll processing and reporting in India, and the various regulations and tax norms that impact salary and wage computation. Further, we explain India’s complex social security system and gratuity law, and how it applies to companies. Finally, we describe the importance of IT infrastructure, compliance, and confidentiality when processing payroll in India.

Leave a Reply

Your email address will not be published. Required fields are marked *

Never miss an update

Stay ahead of the curve in emerging Asia by subscribing to our regional publications. Subscribers take full advantage of all our website features and receive regular updates from our local experts on doing business in Asia.

Subscribe
India Briefing