The Eurasian Economic Union (EEU) is an economic alliance primarily situated in northern Eurasia. It facilitates the free movement of goods, services, capital, and labor among its member countries. Current members include Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.
A Free Trade Agreement (FTA) is a contract between two or more nations aimed at reducing or eliminating trade barriers, such as tariffs and import quotas. The goal of FTAs is to strengthen economic connections and encourage trade and investment by fostering a more predictable and transparent trading environment.
India and the EEU are in discussions to establish an FTA to enhance economic cooperation, boost bilateral trade, and offer improved market access for goods and services. This agreement is poised to benefit various sectors, including engineering, electronics, and agriculture, by lowering or removing trade barriers.
The proposed FTA is expected to yield significant advantages for India, such as:
On March 28, senior officials from India and the EEU convened to formally kick off FTA negotiations. Earlier, two feasibility studies were conducted to evaluate the potential impacts and benefits of the agreement.
Within the EEU, Russia stands as India’s largest trading partner, with bilateral trade reaching USD 49.4 billion in the fiscal year 2023. Trade volumes with other EEU countries like Armenia, Belarus, Kazakhstan, and Kyrgyzstan, while smaller, are also integral to India's trade ecosystem.
India has successfully entered into similar agreements with other nations and blocs, such as a prior FTA with the European Free Trade Association (EFTA), which includes Iceland, Liechtenstein, Norway, and Switzerland. These agreements reflect India’s broader strategy to foster advantageous trade relations with significant economic players across the globe.
Q1. What is the main purpose of the EEU?
Answer: The EEU aims to facilitate economic integration among its member states through the free movement of goods, services, capital, and labor, enhancing regional economic cooperation.
Q2. How does an FTA benefit economies?
Answer: An FTA reduces trade barriers, encouraging trade and investment. It creates a stable environment for businesses by promoting transparency and predictability in economic exchanges.
Q3. What sectors will benefit from the India-EEU FTA?
Answer: The FTA is anticipated to primarily benefit sectors such as engineering, electronics, and agriculture, by providing better access to the EEU market for Indian goods.
Q4. How significant is India's trade with Russia within the EEU?
Answer: India's trade with Russia is substantial, amounting to USD 49.4 billion in 2023, making Russia the largest trading partner for India within the EEU.
Q5. Has India pursued other trade agreements as well?
Answer: Yes, India has previously signed FTAs with other countries and blocs, including the EFTA, as part of its strategy to strengthen trade relations globally.
Question 1: What is the primary focus of the Eurasian Economic Union?
A) Military alliance
B) Cultural exchange
C) Economic integration
D) Political union
Correct Answer: C
Question 2: Which of the following is NOT a member of the EEU?
A) Armenia
B) Kazakhstan
C) India
D) Russia
Correct Answer: C
Question 3: What is a key goal of a Free Trade Agreement?
A) Increase tariffs
B) Eliminate trade barriers
C) Restrict imports
D) Isolate economies
Correct Answer: B
Question 4: When did India and the EEU initiate FTA negotiations?
A) January 1, 2023
B) March 28, 2023
C) June 15, 2022
D) December 31, 2023
Correct Answer: B
Question 5: Which sector is expected to benefit from the India-EEU FTA?
A) Textile
B) Tourism
C) Agriculture
D) Fishing
Correct Answer: C
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