EAEU-India Free Trade Area: Potential Tariff Liberalization Effects for Russia
https://doi.org/10.24833/RJWPLN-2022-3-81-100
Abstract
In 2017 negotiations on the free trade area between India and the EAEU countries entered an active phase. The negotiations covered such issues as import tariff liberalization and the elimination of non-tariff restrictions. The present study aims to quantify the potential impact of mutual tariff liberalization on the dynamics of bilateral trade between Russia and India, in order to develop key principles for Russia’s negotiating position (as part of the EAEU), taking its strategic priorities into account. The research methodology is based on the SMART partial equilibrium model and a qualitative analysis of modern trends in import demand and the degree of India’s trade protectionism towards imports from the EAEU countries. The study found that symmetric bilateral tariff liberalization may result in a higher potential increase in Russian exports to India than imports, which will increase the bilateral trade surplus. This is in the interests of Russia, but it hardly meets the strategic interests of India due to its chronic trade deficit. The free trade area may lead to diversification of the commodity component of Russian exports due to the growing export supplies of Russian coal, and, to a lesser extent metals (aluminum, copper and articles thereof). However, the opportunities to increase the share of hi-tech products in the structure of Russian exports remain limited. The free trade area can become an important tool for strengthening Russian exporters of fertilizers, as well as certain categories of agricultural products. In turn, Indian exporters can strengthen their positions on the Russian medicines market, an increase the share of textile products, jewellery, and certain categories of agricultural products. The results can help develop Russia’s positions (as an EAEU member) in multilateral negotiations.
About the Author
E. Ya. Arapova
MGIMO University
Russian Federation
Russian Federation
Ekaterina Ya. Arapova – PhD (Economics), Director at Centre of sanction politics expertise
76 Prospect Vernadskogo, 119454, Moscow
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For citations:
Arapova E.Ya. EAEU-India Free Trade Area: Potential Tariff Liberalization Effects for Russia. Russian Journal of World Politics and Law of Nations. 2022;1(3):81-100. https://doi.org/10.24833/RJWPLN-2022-3-81-100
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