India and the Eurasian Economic Union (EAEU), comprising Armenia, Belarus, Kazakhstan, Kyrgyz Republic and Russia, on Wednesday signed the Terms of Reference to launch negotiations for a Free Trade Agreement (FTA), according to a statement issued by the Ministry of Commerce and Industry.

The terms of reference were signed in Moscow by Additional Secretary, Department of Commerce, Ajay Bhadoo, on behalf of India, and Deputy Director, Trade Policy Department, Eurasian Economic Commission (EEC), Mikhail Cherekaev.

During his visit, Bhadoo also called on the Minister in charge of Trade, EEC, Andrei Slepnev. The heads of negotiation groups apprised the Minister about the milestone achieved with the signing of the terms of reference and discussed the next steps to formally launch the negotiation process, including organisational aspects of the future trade deal, the statement said.

Both sides noted the growing trade turnover between India and the EAEU, which stood at $69 billion in 2024, which represented a 7 per cent increase over the corresponding figure for 2023. With a combined GDP of $6.5 trillion, the proposed FTA is expected to expand market access for Indian exporters, support diversification into new sectors and geographies, enhance competitiveness, and deliver significant benefits to Micro, Small and Medium Enterprises (MSMEs), the official statement said.

The terms of reference provide the framework for negotiations and are expected to unlock untapped trade potential, increase investments and establish a stronger, durable India–EAEU economic partnership. Both sides reaffirmed their commitment to the early conclusion of the agreement and to building a long-term institutional framework for trade cooperation, the statement added.

Trade discussions between India and Eurasia include various sectors, such as pharmaceuticals, fertilisers, and electric vehicles.

While India has a trade surplus with most EAEU countries, it has a significant trade deficit with Russia, largely due to oil imports.

The proposed International North-South Transport Corridor (INSTC) is seen as a crucial infrastructure project that can further enhance trade connectivity and reduce transportation costs between India and Eurasia.