NEW DELHI: Hassle-free customs clearance and easier trade routes are key to India’s successful free trade agreement with the Eurasian Economic Union (EEU), a government appointed committee has said.
A joint study group set up last year to explore the feasibility of a free trade pact between India and Russia-led five-member EEU has recommended setting up of a green corridor that will exempt shipments of “credible” exporters from customs inspection when crossing the border, especially textiles, leather and pharmaceutical products, which are expected to get higher market access.
It has suggested that the agreement cover trade in goods, services and investment to overcome three major obstacles in expanding economic ties with the EEU – lack of a formal trade and economic partnership, inadequate trade architecture and connectivity bottlenecks.
“This agreement is crucial for India because our presence is limited there. Eurasia is important for our energy needs and Russia is an old friend. Russia is keen to have a relationship with India,” said a person aware of the findings of the report.
The joint study group comprises officials from both India and the EEU who have done the feasibility study for the agreement officially known as a Comprehensive Economic Partnership Agreement.
Indo-Russian trade amounted to $6.2 billion in 2015-16. Both countries have set a target to raise it to $30 billion by 2025, and mutual investment from $10 billion to $15 billion by then.
“It is very important to have a diversified market and here are countries willing to offer us market access. We should look at trade with this region from export diversification point of view,” said Ram Upendra Das, professor at the external affairs ministry think tank Research and Information System for Developing Countries.
To address the connectivity issue, India is already negotiating the International North-South Transport Corridor Project (INSTC) with Russia to promote bilateral trade.