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1 Jun, 2017 09:45

Russia-led economic bloc can boost trade with India by 800%

Russia-led economic bloc can boost trade with India by 800%

The Eurasian Economic Union (EEU) led by Russia will begin free trade talks with India during the St. Petersburg International Economic Forum (SPIEF 2017), according to an Indian official. The deal is expected to dramatically increase trade between the countries.

"I am especially pleased to address you at this moment when 175 million people of EEU countries and 1.2 billion people of India are on the threshold of a new era of economic partnership. However, despite close ties, the current volume of trade is only about $8.4 billion,” Secretary of Department of Industrial Policy & Promotion at India's Ministry of Commerce & Industry Ramesh Abhishek told TASS news agency.

The Indian official said a study into creating a free trade zone started in 2015.

"According to the report, in ten years the volume of trade could reach $57-62 billion," Abhishek said.

"A joint statement on the start of negotiations on a comprehensive agreement on a free trade area is likely to be made very soon," he added.

The EEU is a trade bloc established in 2015 on the basis of the Customs Union of Russia, Kazakhstan, and Belarus. Armenia and Kyrgyzstan later joined it.

The Eurasian Economic Commission (EEC) expects the agreement between the EEU countries and India will be signed within two years, Minister for Trade of the bloc Veronika Nikishina told RIA Novosti. A memorandum on the start of talks will be signed on June 3 at the St. Petersburg forum.

India will also become an official member of the Shanghai Cooperation Organization (SCO) during the organization’s summit in Astana in June, according to Kremlin aide Yuri Ushakov.

The political, economic and military organization was founded in 2001 in Shanghai by the leaders of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. Pakistan and India were granted membership status in 2016, and both are expected to become full-fledged members this year during the June summit.

Russia and India will also sign a credit agreement for the construction of two reactors at the Kudankulam Nuclear Power Plant (NPP), Ushakov told TASS.

"Negotiations on the fifth and sixth reactors [of Kudankulam NPP] are underway," Ushakov said.

"A framework agreement and an intergovernmental protocol on the Russian credit for these goals are planned for signing during [Prime Minister of India Narendra] Modi’s visit to St. Petersburg on June 1," he added.

The goal is to build at least 12 NPP reactors of Russian design in India during the next 20 years, Ushakov said.