Core Insights - India has evolved its approach to free trade agreements (FTAs), moving from a cautious stance to a more flexible and confident negotiation strategy, particularly in sensitive sectors like agriculture and manufacturing [1][7][10] Trade Agreements and Concessions - The initial duty concessions under early FTAs led to increased imports by companies like Honda and Sony, raising concerns about the impact on domestic manufacturing [1] - The government has been careful in its tariff policies, particularly avoiding cuts in sensitive sectors such as wine, spirits, and automobiles to protect local industries [2][12] - A notable shift occurred with the interim trade agreement with Australia in 2022, where India showed willingness to lower tariffs on wine above a certain price threshold while providing technical support to domestic producers [3][12] - Subsequent agreements expanded the scope of concessions, including products like chocolates and watches in the pact with the European Free Trade Association (EFTA), which also included a commitment of $100 billion in foreign direct investment [6][12] - By the time of the agreement with the European Union, the list of protected items had significantly decreased, with negotiators more open to trade-offs, reflecting increased confidence [7][12] Specific Trade Conditions - Tariff cuts on French and Spanish wines were exchanged for limited access to European markets for Indian grapes, with strict conditions on imports of pears and apples, including volume caps and a minimum import price [8][12] - The government tailored concessions based on market opportunities, declining duty concessions for British electric vehicles but allowing limited imports under the EU deal [9][12] Engagement on New Issues - India's evolving approach includes engagement on "new issues" in modern FTAs, such as intellectual property rights, digital trade, and environmental concerns, while ensuring these do not exceed existing international obligations [10][12]

Core Insights - India and the European Union have finalized a significant free trade agreement that will gradually reduce import duties on European cars from 70%-110% to 10%, applicable to a quota of 250,000 vehicles priced above €15,000 ($17,952) per year [2][23]. Industry Impact - The deal provides European automobile manufacturers with access to India's third-largest car market, which is projected to reach 6 million units by 2030, driven by a young population with increasing disposable incomes [5]. - Despite the tariff reductions, the majority of cars sold in India are priced below ₹2 million ($21,756), indicating that the market for European luxury cars may remain limited due to additional local taxes [6][8]. - The Indian auto market is currently dominated by local manufacturers such as Maruti Suzuki, Hyundai, Tata, and Mahindra, which have established a strong presence over the past two decades [7]. Competitive Landscape - The European luxury brands, including Mercedes-Benz, BMW, JLR, Audi, and Volvo, sold 49,000 cars in India in the financial year ending March 2025, compared to total passenger car sales of 4.3 million [8]. - Indian and Korean manufacturers are rapidly expanding their market presence through capacity growth and frequent product launches, putting pressure on European brands [9]. - The free trade agreement may prompt European companies to reassess their business strategies in India, potentially leading to the introduction of new products and deeper localization [10][11]. Market Reactions - Following the announcement of the trade deal, shares of major Indian auto companies, including Mahindra & Mahindra, Hyundai Motor India, Maruti Suzuki, and Tata Motors, fell between 1.5% and 4% [14]. - Industry leaders view the trade deal positively, as it allows Indian manufacturers duty-free access to European markets while still protecting the majority of local sales volumes [15]. Consumer Preferences - The evolving consumer preferences in India may lead to increased competition in the premium SUV segment, which is priced above ₹2.3 million, as European brands can now offer competitive pricing [13]. - There is a growing demand for cars with better amenities, and consumers hope that European manufacturers will introduce their latest models in India at reasonable prices following the trade deal [16].

Market Performance - The 30-share BSE Sensex increased by 319.78 points, or 0.39%, closing at 81,857.48, with a daily high of 82,084.92 and a low of 81,088.59 [3] - The 50-share NSE Nifty rose by 126.75 points, or 0.51%, ending at 25,175.40 [3] - Key gainers included Adani Ports, Axis Bank, Tata Steel, Tech Mahindra, NTPC, State Bank of India, UltraTech Cement, and Bharat Electronics [3][6] Company Highlights - Axis Bank's net profit for the December quarter grew by 4% to Rs 7,010.65 crore, compared to Rs 6,742.99 crore in the same period last year, leading to a stock price increase of over 4% [4][6] - In contrast, companies such as Mahindra & Mahindra, Kotak Mahindra Bank, Asian Paints, Eternal, and ITC experienced declines [4][6] Trade Agreement Impact - India and the European Union finalized a significant free trade agreement, described as the "mother of all deals," which is expected to positively influence investor sentiment amid global trade disruptions [5][7] - The finalization of the India-EU bilateral trade agreement provided some support to Indian equities, despite a broader risk-off environment due to US tariff policies [7] Investor Activity - Foreign portfolio investors sold equities worth Rs 4,113.38 crore, while domestic institutional investors purchased stocks worth Rs 4,102.56 crore, indicating mixed investor sentiment [8]

Market Overview - Asia-Pacific markets exhibited mixed trading patterns, with a notable increase in gold prices as investors sought safe-haven assets amid geopolitical uncertainties [1] - Spot gold prices reached a record high of over $5,000 per ounce, specifically trading at $5,033.99 per ounce as of 7:52 a.m. Singapore time [1] Trade Relations - Canadian Prime Minister Mark Carney announced that Canada will not pursue free trade agreements with China without prior notification, in response to U.S. President Donald Trump's warning of a 100% tariff if Canada engages in a trade deal with China [2][3] - Carney emphasized Canada's commitment under the Canada-United States-Mexico Agreement (CUSMA) to notify before pursuing free trade agreements with non-market economies [3] Regional Market Performance - Japan's Nikkei 225 index decreased by 1.52%, while the Topix index fell by 1.76% [3] - In contrast, South Korea's Kospi index increased by 0.64%, and the small-cap Kosdaq index rose by 2.28% [3]

Core Insights - India's recent free trade agreements (FTAs) may not sufficiently counteract the negative impact of US tariffs on its exports, particularly in labor-intensive sectors like textiles and apparel [1][9] - The US remains India's largest export market, accounting for 19.3% of total exports prior to the imposition of tariffs, which are among the highest globally at 50% [9][10] - The uncertainty surrounding trade negotiations has pressured the Indian rupee and led to a $5 billion expenditure by the government to support exporters [9][10] Trade Agreements and Economic Impact - Many of the newer FTAs, such as those with Oman and New Zealand, are unlikely to significantly boost India's exports due to relatively small trade volumes [2][9] - Of India's top 20 export markets, 16 have FTAs or are in negotiations, collectively representing 51% of total trade [5][10] - The effectiveness of these agreements in translating into tangible export growth remains uncertain, particularly regarding their potential to strengthen India's industrial base [6][10] Future Prospects - The anticipated India-EU FTA is viewed as a significant opportunity for export diversification and increased trade openness with a large economic bloc [8][10] - Upcoming visits by European Commission and Council leaders to India may enhance the likelihood of finalizing the trade agreement after prolonged negotiations [8][10] - Approximately 70% of India's exports to the US are at risk if the 50% tariffs continue, with sectors like leather, apparel, and marine exports being particularly vulnerable [10]

Amid deepening strategic ties and discussions around Free Trade Agreement (FTA) between India and Israel gaining momentum, the State Bank of India (SBI), the only Indian bank with a presence in Israel, is looking to facilitate bilateral trade in Indian rupees."In view of India's significant trade flows from/to its partner countries and growing interest among the global trading community to trade in the Indian rupee, it has been envisaged by our banking regulators, i.e. Reserve Bank of India, to permit India ...

New Zealand has finalized a free-trade agreement with India, local media report https://t.co/DURI3ENnEh ...

Trade Agreement - India and Oman have signed a free trade agreement [1] - The pact eliminates tariffs on key goods [1] - The agreement simplifies market access [1] Strategic Implications - The agreement supports India's efforts to strengthen economic ties with the Middle East [1] - The agreement supports India's efforts to strengthen strategic presence in the Middle East [1]

The UK finalized a long-awaited free trade agreement with South Korea that the government said would boost exporters from automaker Bentley to beverages firm Diageo https://t.co/LIEHlMoG0n ...

RT Wally Rashid (@wallyrashid)In 1984, the U.S. was negotiating a Free Trade Agreement with Israel.A classified memo listed American industries that would be harmed if duties were removed.@AIPAC then stole this document and sent it to Israeli officials, to hurt America's economy while benefiting Israel. https://t.co/Oj5NaMbpu2 ...