Rupee-Rouble trade stuck over sanction fears; India pushes FTA talks with Russia-led EAEU

The Rupee-Rouble trade is yet to materialise as banks and companies in the services sector with exposure to the United States don't want to risk sanctions, government sources told CNBC-TV18.

On increasing trade with Russia, government sources indicated that India aims to reduce non-tariff barriers for exports to Russia to cut its trade deficit with the world's largest country, which currently has a $60 billion trade surplus with India.

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India's negotiating team is expected to travel to Russia in February after the Union Budget 2026 for the 2nd round of negotiations for a potential Free Trade Agreement (FTA) with the Russia-led Eurasian Economic Union (EAEU).

On 20th August 2025, India and the EAEU had signed the Terms of Reference (ToR) in Moscow to launch negotiations for an FTA. The EAEU comprises of Russia, Kazakhstan, Armenia, Belarus, and Kyrgyzstan with an observer status to Cuba, Moldova, and Uzbekistan.

Government sources pointed out that gateway issues, defence exports and technology transfer are likely to figure in discussions during FTA talks with Russia, highlighting the scope for labour mobility across sectors despite the possibility of a language barrier impeding labour mobility in the services sector to some extent.

With Russian economy currently focused on war, sources added that most of their consumer product imports are coming in from China, though marine exports from India have already started increasing.

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Russia has already relaxed import requirements for Indian marine products and is learnt to be in course for further relaxation. Sources had earlier indicated that the talks would focus on reducing non-tariff barriers for export of India’s products into the EAEU bloc. India intends to address concerns of its exporters, which currently face regulatory overlap between the Russian, EAEU and European rules.

Sources had highlighted that India aims to ensure clarity in rules for exports of products which need labels in the Russian language within and outside packages being exported.