Dmitry Kuznetsov, expert at the Gaidar Institute, and Olga Ponomareva, expert at the Economic Policy Foundation, in a commentary for RBC assessed the impacts of the large-scale trade agreement between the EU and India, noting its potential benefits for Russia
Olga Ponomareva emphasized that the agreement opens the EU's access to a traditionally closed market. "Previously, European goods were too expensive for locals given import duties: India is one of the most closed economies characterized by high tariff barriers (17% on average), especially in agriculture (around 40% on average). However, now, free trade regime offers the EU significant advantages," she noted.
According to the experts, India benefits from its partnership with the EU in a number of ways. "India gains long-term stability in its relationship with a partner that, on the one hand, has a high-income market, stable demand, and regulation, and, on the other, a technological base and willingness to invest in localizing production," commented Dmitry Kuznetsov.
Olga Ponomareva added that access to technology and investment is critical. "China, the US, and the EU have the greatest control over global technology chains. Through closer cooperation with European companies, New Delhi will attempt to increase its technological potential," the expert explained. She also pointed to the deal's role in overcoming stagnation in foreign investment: "Without it, maintaining rapid economic growth is impossible. It is a source of funding for ambitious industrial and infrastructure projects, and public funding is under pressure from the dual deficit (trade balance and budget)."
Dmitry Kuznetsov emphasized the importance of diversification for New Delhi amid the conflict with the United States: "New Delhi is seeking to reduce exports to the United States (which account for one-fifth of all exports) and imports from China (one-sixth of India's total imports). Some of India's main exports are telephones (4%) and pharmaceuticals (4%), and a significant portion of these shipments go to the United States, whose tariff policy has been very unstable over the past year."
The expert also noted that the agreement is a step toward multipolarity, rather than formation of an "alliance against someone." "This is a desire to diversify foreign economic relations in a world where dependence on a single partner can result in undesirable shocks to the economy," Dmitry Kuznetsov believes.
Dmitry Kuznetsov also addressed the impact of the deal on Russian-Indian relations. In his opinion, EU pressure will not force India to curtail cooperation with Russia.
"Forcing India to sever trade relations with Russia is unlikely, just as the United States, a crucial market for India, has failed to do so. Furthermore, the EU itself has been unable to completely separate Turkey from Russia, even though it has a much deeper level of integration with the EU, that is, a customs union," the expert stated.
Moreover, Dmitry Kuznetsov sees direct potential benefits for the Russian economy in this agreement. "Finally, the agreement with the EU will stimulate production growth in India and increase demand for industrial raw materials and energy resources, which will only benefit Russia," he hopes.
However, the expert also pointed to potential competition. "The agreement creates preferential access for European industrial producers to the Indian market, which is also a promising market for Russian non-resource exports," Dmitry Kuznetsov explained.