India-Russia FTA talks with EAEU reach advanced stage, says Russian Deputy PM Manturov

The proposed FTA with the Eurasian Economic Union is a significant step in India's strategy to diversify its economic partnerships and secure supply chains. While bilateral trade has surged from ~$13 billion to over$60 billion recently, largely driven by discounted Russian crude oil imports, this rapid expansion has created a massive trade deficit for India. To address this, India is pushing for market access and the removal of non-tariff barriers (like stringent quality standards or complex customs procedures) to boost its exports. Furthermore, securing a robust Rupee-Ruble payment mechanism is critical to bypass Western sanctions on Russia and settle trade in local currencies, a move that aligns with India's broader push for the internationalization of the Rupee. The FTA will also provide Indian industries access to the EAEU's vast reserves of energy, critical minerals, and rare earths, which are vital for manufacturing electronics, EVs, and defense equipment, reducing dependence on China amidst global supply chain weaponization.

The deepening India-Russia ties, despite Western pressure over the Ukraine conflict, underscore India's commitment to strategic autonomy (the ability to make independent foreign policy decisions based on national interest). Russia remains a crucial partner for India's energy security and defense modernization. The focus on the Northern Sea Route (NSR) is geopolitically significant. The NSR, primarily controlled by Russia, offers a shorter shipping route between Europe and Asia compared to the Suez Canal, potentially lowering freight costs and reducing transit time. India's interest in the NSR aligns with its broader Arctic policy, which seeks scientific research, climate monitoring, and economic engagement in the region. Russia's assurance of uninterrupted energy and fertilizer supplies is crucial for India's macroeconomic stability and agricultural sector, respectively, insulating the domestic economy from global price shocks.

The collaboration extends significantly into advanced technology sectors, crucial for India's goal of achieving technological sovereignty. The partnership in nuclear energy, anchored by the Kudankulam Nuclear Power Plant, is now expanding to include Small Modular Reactors (SMRs). SMRs are advanced nuclear reactors with a capacity of up to 300 MW(e) per unit, offering advantages like lower capital costs, modular construction, and enhanced safety features, making them suitable for off-grid or remote locations and contributing to India's energy transition goals. In the space sector, cooperation encompasses manned spaceflight (crucial for Gaganyaan), rocket engines, and satellite navigation (integrating Russia's GLONASS with India's NavIC). Furthermore, joint exploration and processing of rare earth metals are critical, as these elements (like Neodymium for magnets) are essential components in green technologies, aerospace, and advanced electronics, areas where India aims to build self-reliance.