Eurasian Economic Union (EAEU)

The Eurasian Economic Union, or EAEU, is a group of five countries from the former Soviet Union that have joined their economies together. The members are Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan. Inside the union, goods, services, money and workers can move freely, and all members charge the same import tax on goods coming from outside. You can think of it as a smaller, looser version of the European Union, built around Russia.

Why does it exist?

When the Soviet Union broke up in 1991, its republics became separate countries. But their factories, railways, pipelines and markets were still tied to each other. Putting up new borders and taxes between them hurt trade. The EAEU was created to rebuild one big common market, so that a factory in Kazakhstan can sell to Russia or Belarus as easily as inside its own country. For Russia, it is also a way to keep economic influence in its neighbourhood.

Where did it come from?

The idea of a "Eurasian Union" was first proposed in 1994 by Nursultan Nazarbayev, the first President of Kazakhstan. It was built step by step:

• 2000: The Eurasian Economic Community (EurAsEC) was formed as an early cooperation body.
• 1 January 2010: Russia, Belarus and Kazakhstan started a Customs Union, with one common external tariff.
• 2012: The three moved to a Single Economic Space, which began opening up services, capital and labour too.
• 29 May 2014: Leaders of Russia, Belarus and Kazakhstan signed the Treaty on the Eurasian Economic Union in Astana (Kazakhstan's capital).
• 1 January 2015: The treaty came into force and the EAEU was born. EurAsEC was wound up at the same time.
• 2 January 2015: Armenia joined.
• August 2015: Kyrgyzstan became the fifth member.

How does it work?

The EAEU has four main bodies:

• Supreme Eurasian Economic Council: the heads of state of all members. This is the top body that takes the biggest decisions.
• Eurasian Intergovernmental Council: the heads of government (prime ministers).
• Eurasian Economic Commission: the permanent working body, based in Moscow. It runs day-to-day matters, including trade talks with other countries. This is why trade deals are signed with the Commission and not with each member separately.
• Court of the EAEU: based in Minsk (Belarus). It settles disputes about the union's rules.

Because the members share one common tariff, a member cannot sign its own separate tariff deal with an outside country. All FTAs are negotiated by the union as a whole. So India cannot sign a goods FTA with Russia alone; it must sign with the EAEU.

The key parts and facts

• The union promises the "four freedoms": free movement of goods, services, capital and labour.
• There is no common currency. Each member keeps its own money (the Russian rouble, Kazakh tenge, and so on).
• Its population is about 185 to 190 million (2025 estimates), and Russia makes up most of its economy.
• Observer states (they attend meetings but are not members): Moldova (since 2018), Uzbekistan and Cuba (since 2020), and Iran (since December 2024).
• FTAs signed by the EAEU include Vietnam (in force since 1 October 2016) and Iran (a full FTA in force since 15 May 2025). Deals have also been signed with Serbia and Singapore, and arrangements reached with the UAE, Mongolia and Indonesia.

India and the EAEU

India and the EAEU signed the Terms of Reference to start FTA talks on 20 August 2025 in Moscow. Terms of Reference are the agreed rulebook for the talks: what will be discussed and how. They set an 18-month work plan, focused mainly on trade in goods. The first round of talks was held in New Delhi in November 2025.

• Russia is by far India's biggest trade partner in the bloc. India-Russia trade was about USD 68.7 billion in 2024-25, but India exported only about USD 4.9 billion and imported about USD 63.8 billion, mostly crude oil.
• India's trade with the other four members is small: a few hundred million dollars each.
• India and Russia have set a target of USD 100 billion in bilateral trade by 2030.
• India hopes an FTA will help its exporters (medicines, machinery, farm and marine products) sell more, and reduce the huge trade gap with Russia.
• Connectivity matters too. The International North-South Transport Corridor (INSTC), a ship-rail-road route from Mumbai through Iran to Russia, links India to EAEU markets.

Commonly confused concepts

• EAEU vs Commonwealth of Independent States (CIS): The CIS (1991) is a loose political grouping of former Soviet states. The EAEU is a tighter economic union with a common tariff and its own court.
• EAEU vs Shanghai Cooperation Organisation (SCO): The SCO is a security and political grouping that includes India and China. India is not a member or observer of the EAEU.
• EAEU vs European Union (EU): Both are economic unions, but the EU has a common currency (the euro, used by most members) and a directly elected parliament. The EAEU has neither.
• Customs union vs FTA: In an FTA, each member keeps its own tariffs for outsiders. In a customs union like the EAEU, all members charge the same outside tariff. That is why the EAEU negotiates as one.

Issues, criticism and the way forward

• Russia's dominance: Russia is much larger than the other members, so critics say the union mainly serves Russian interests.
• Sanctions: Western sanctions on Russia since 2022 make payments and banking with Russia harder. This can slow trade with the whole bloc.
• Trade gap: India's trade with the bloc is lopsided because of oil imports. An FTA could help balance it, but Indian industry worries about sectors like steel and fertilisers.
• Way forward: Experts suggest India use the FTA to push exports of medicines, farm goods and machinery, settle more trade in local currencies, and make the INSTC fully work to cut transport time and cost.

Concepts to Know

• Customs union: A group of countries that remove tariffs among themselves and charge the same tariff on goods from outside the group.
• Common external tariff: The single import tax rate that all members of a customs union charge on goods from non-members.
• Terms of Reference (ToR): A document both sides sign before trade talks, listing the topics, scope and timeline of the negotiations.
• Observer state: A country that can attend a group's meetings and follow its work but cannot vote or take part as a full member.
• Trade deficit: When a country buys (imports) more from a partner than it sells (exports) to that partner.