11-Sep-2019: India skips EAEU meeting
India skipped a meeting of the Eurasian Economic Union (EAEU), which was organised by the Shanghai Cooperation Organisation (SCO) at Xi’an in China. India has been a member of the SCO since 2017.
The EAEU and the Belt and Road Initiative: In November 2018, Chinese Premier Li Keqiang and Russian Prime Minister Dmitry Medvedev met in Beijing for the 23rd annual meeting between Chinese and Russian heads of government, and the two sides agreed to enhance trade and economic ties. After the meeting, a press release by the Chinese Ministry of Foreign Affairs said that China would “synergize the Belt and Road Initiative and the Eurasian Economic Union". Both sides expressed willingness to dovetail the China-proposed Belt and Road Initiative and Russia’s Eurasian Economic Union.
The BRI is a mammoth infrastructure project unveiled by China in 2017, which plans to connect the three continents of Asia, Europe, and Africa.
The ‘Belt’ part refers to the Silk Road Economic Belt, consisting of three overland routes. First, a link between China, Central Asia, Russia and Europe. Second, a link through Central Asia and West Asia linking China with the Persian Gulf and the Mediterranean Sea. And third, a connection from China to Southeast Asia, South Asia, and the Indian Ocean. The ‘Road’ part refers to the 21st century Maritime Silk Road, creating maritime trade channels from China through the South China Sea, the Indian Ocean, and the South Pacific.
The China-Pakistan Economic Corridor, an important part of the BRI, passes through Pakistan Occupied Kashmir (PoK). In May 2017, India strongly opposed the BRI, and the Ministry of External Affairs said: “No country can accept a project that ignores its core concerns on sovereignty and territorial integrity.”
The SCO, an intergovernmental body for security and economic cooperation in the Eurasian region, was formed in 2001 by the ‘Shanghai Five’ (China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan), in the wake of the Soviet Union’s collapse in 1991. Uzbekistan joined the SCO in 2001, with India and Pakistan following suit in 2017. The SCO has traditionally prioritised on counter-terrorism, listing terrorism, separatism and extremism as “the three evils”. However, since its formation, the SCO’s domain has expanded to include subjects such as culture and economics. Since the BRI’s launch in 2017, India has remained firm on not singing it off at the SCO’s annual summits in 2018 and 2019. The summit’s declarations of both years reflected the endorsement of the controversial project by all members but India.
28-Apr-2017: India, Eurasia union to seal pact
India is set to formalise a free trade agreement with the Eurasian Economic Union, clearing the decks for negotiations on deepening trade relations with the five former Soviet republics. The report of the Joint Feasibility Study Group had been accepted by both sides and the formal negotiations would begin by July.
The Eurasian Economic Union comprises Russia, Belarus, Armenia, Kazakhstan and Kyrgyzstan. The FTA is expected to open up a huge market with a trade potential of $37 to 62 billion.
Trade between India and the five Eurasian countries stands at about $11 billion. The FTA with the Eurasian countries was dictated by India’s need to diversify into new markets. We have a targeted trade of $30 billion with the five countries by 2025 and $15 billion annual investment.
At the meeting, experts highlighted the need for better understanding of the challenges in the new market like non-tariff barriers and quality standards before the negotiations take place.
Eurasian market could open up new export opportunities for Kerala in medical tourism, IT and IT-enabled services, besides traditional sectors like spices, marine products, coir and rubber. There is a need for safeguards in the pact to protect the state’s interests. Exporters and representatives of trade organisations called for steps to prevent dumping of goods and misuse of the rules of origin. They also highlighted the need for clarity on sanitary and phytosanitary measures, import licensing, quantitative restrictions and trade remedies.