- A major step was taken last week towards economic integration between Eurasian region and Southeast Asia that is significant for boosting India’s trade in the region ahead of Prime Minister Narendra Modi’s proposed visit to Russia and Central Asia this July.
- Southeast Asia’s emerging economy Vietnam and the Eurasian Economic Union (EEU) on Friday signed a free trade agreement (FTA) that officials said would boost both bilateral and collective cooperation between the two sides. Incidentally, this comes days ahead of President Pranab Mukherjee’s trip to Belarus this week. Belarus is a member of EEU and India and Belarus are expected to discuss India joining EEU during Mukherjee’s trip, officials said.
- The Vietnam-EEU FTA is expected to foster a stable and favorable legal framework for economic development of signatories. Economists have noted that the agreement stipulates liberalizing customs regulations. India would take a cue from Vietnam-EEU FTA in deciding to join to EEU. This FTA became the first international document on creating a free trade zone between the EEU and a third party .
India and EEU
- The EEU currently comprises Russia, Belarus, Kazakhstan and Armenia. Ratification procedures are currently under way for Kyrgyzstan to join the trade bloc.
- If India decides to join EEU, it will assist India to realize the untapped potential in trade between Delhi and countries of the region.
- Modi is also planning to visit all five Central Asian Republics in July.
- Russia has been pushing India to join EEU. Modi’s visit is expected to focus on expanding economic partnership with the Eurasian and Central Asian region by harnessing markets and natural resources.
- Officials in India hinted that India is closely studying the agreement to understand the benefits.
- Dung also met Kazakhstan President Nursultan Nazarbayev and discussed cooperation in oil and gas sectors. Incidentally India is present in the oil and gas sectors of both Kazakhstan and Vietnam.
- The free trade zone will save exporters from the EEU about $40-60 million in the first year of its operations. EEU-Vietnam FTA will enter into force 60 days after it is ratified in accordance with national legislation in all EEU member countries and Vietnam.