India is on a trade agreement tear. Over the last year or two, New Delhi has finalized deals with the UK, New Zealand, Oman, and even locked in a massive agreement with the European Union. It feels like the Ministry of Commerce is collecting free trade agreements like trading cards. Naturally, the focus is shifting back to a deal that has been sitting on the back burner for nearly a decade: the India-Eurasian Economic Union (EAEU) pact.
Both sides signed the terms of reference in August 2025, laying out an 18-month roadmap to get things moving. Now, with a fresh round of talks happening in Moscow this June focused on non-tariff measures, some think a deal is right around the corner. For a different perspective, read: this related article.
Don't buy into the hype just yet. While a trade deal covering Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan sounds great on paper, the ground reality is incredibly lopsided.
The US$50 Billion Problem in India-EAEU Trade
If you look at the raw numbers, India's trade with the EAEU looks massive. Total trade turnover for the 2025-26 fiscal year came in at US$60.7 billion. That sounds impressive until you look closer and realize the whole relationship is completely out of whack. Similar insight on this trend has been published by Business Insider.
Out of that US$60.7 billion, a staggering US$55.4 billion consists of Russian exports to India. The remaining four countries in the bloc—Armenia, Belarus, Kazakhstan, and Kyrgyzstan—combined for a microscopic US$860 million in total trade with India. Let's be honest about what this bloc really is. It is Russia and a few of its neighbors.
Because of this setup, India is sitting on a trade deficit of roughly US$50 billion with the EAEU. The spike in trade isn't driven by a balanced exchange of goods. It is almost entirely driven by India buying discounted Russian crude oil. This setup works perfectly fine for India's immediate energy security, but it makes for a horrible foundation for a comprehensive free trade agreement.
What India Actually Wants From a Deal
Indian exporters aren't getting much out of the current arrangement. While Russian crude keeps flowing south, Indian businesses are struggling to send their goods north. If New Delhi is going to sign a deal, it needs to balance the scales.
Indian pharmaceutical companies already have a decent footprint in the region, but they face a mountain of regulatory red tape. New Delhi wants to use these talks to harmonize safety protocols and ease compliance with sanitary and phytosanitary measures. If Indian drugmakers can get easier market access, it would give exports a serious shot in the arm.
Engineering goods, machinery, and agricultural products like tea and coffee are also waiting for an opening. Then there is the services sector. India exported US$2.7 billion in services to the EAEU in 2024, showing steady growth over the past few years. Indian IT companies, professionals, and tech startups could easily compete in the Eurasian market if the deal lets them.
The strategy here is to skip a one-size-fits-all approach. Because the bloc allows individual member states to negotiate separate service and investment chapters, India can tailor specific deals with individual countries. Russia accounts for over US$1.6 billion of India's services trade in the bloc, so that is where the focus will stay.
Logistics, Politics, and Why This Pact Stalls
If the benefits for Indian exporters are so obvious, why has this deal been dragging on since a joint study group first looked at it in 2015?
First, getting goods from Mumbai to Moscow is an absolute nightmare. The two regions share no direct land border. Shipping via traditional maritime routes through Europe takes forever and costs too much, especially with current geopolitical tensions. The International North-South Transport Corridor, a multi-modal route crossing Iran, is supposed to solve this. But between Western sanctions on Iran and underdeveloped rail links, it is still not a reliable supply chain alternative.
Second, the geopolitical timing is incredibly awkward. India just pulled off the "mother of all trade deals" with the European Union in January 2026. Brussels is already looking sideways at New Delhi's close relationship with Moscow. Pushing too hard or too fast for a deep trade pact with a Russia-led economic bloc right now could complicate the ratification of the EU deal, which is expected to take through early 2027.
The Interim Route Is the Only Real Option
Don't expect a massive, all-encompassing free trade agreement anytime soon. The structural trade deficit is simply too wide for India to open its doors blindly.
Instead, the two sides are actively discussing a limited, interim trade deal. This approach makes much more sense. By focusing on a select group of goods and tackling specific non-tariff barriers, India can secure better market access for its pharma and engineering sectors without getting trapped in a lopsided treaty.
If you are a business owner looking at the Eurasian market, your next move shouldn't be waiting around for a grand treaty. Focus on navigating the current regulatory environment. Keep an eye on the June meetings in Moscow, specifically regarding the easing of technical barriers to trade. The companies that learn to handle the complex compliance rules today will be the ones that win if a limited deal finally crosses the finish line.
