Category: Beyond

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India-EU FTA sealed after 20 years

India and the European Union have finally signed a Free Trade Agreement (FTA) on January 27, 2026, ending nearly 20 years of negotiations. The agreement was announced at the India-EU Summit in New Delhi by Prime Minister Narendra Modi and European Commission President Ursula von der Leyen, and is being seen as a major step forward in strengthening ties between the two sides.

The deal brings together two huge markets, India and the EU together account for about 2 billion people, nearly a quarter of the world’s economy, and around one-third of global trade. At a time when global trade is facing uncertainty and higher tariffs in many countries, the agreement is expected to create new opportunities for businesses and workers on both sides.

Under the FTA, import duties will be removed or sharply reduced on about 96–97% of goods traded between India and the EU over the coming years. This is expected to help Indian exporters, especially in sectors such as textiles, leather, gems and jewellery, chemicals, engineering goods, and marine products, by making it easier and cheaper to sell their products in Europe.

European companies will also benefit. The EU is expected to save around €4 billion every year as tariffs come down. One of the most talked-about decisions is India’s agreement to cut car import duties from as high as 110% to about 10%, in phases and within a fixed annual limit. Taxes on wines and spirits from Europe will also be reduced gradually.

At the same time, both sides have been careful to protect sensitive areas. Dairy products, cereals, and small cars have been kept out of full tariff cuts to protect local producers, especially in India.

Beyond goods, the agreement opens the door to closer cooperation in services, investment, supply chains, standards, and regulations. It also allows room for future discussions on professional mobility and people-to-people exchanges, which could benefit students, professionals, and businesses.

The agreement now needs to go through legal checks and approvals in India and the EU. Once cleared, it is expected to take effect in late 2026 or early 2027, setting the stage for closer economic cooperation and stronger trade ties between India and the European Union.

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Public sector banks disrupted by nationwide strike

Public sector banks across India faced major disruptions on Tuesday, January 27, 2026, as employees went on a nationwide strike. The action was organized by the United Forum of Bank Unions (UFBU), which represents staff from government-run banks. Major banks affected include State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda, Canara Bank, and Union Bank of India.

The strike was called to press for the implementation of a five-day work week. Union leaders say that while partial agreements exist, the plan has not been fully put into action, prompting the protest. They emphasize that a five-day schedule would improve work-life balance without affecting productivity.

As a result of the strike, many bank branches remained closed, while others operated with minimal staff, limiting services such as cash withdrawals, deposits, cheque clearances, and in-person banking. Customers experienced delays and were advised to plan essential banking tasks in advance.

Banks encouraged people to use digital banking channels, including mobile apps, online banking, UPI payments, and ATMs, most of which continued to operate. However, some ATMs reported cash shortages due to staff unavailability for refills.

Private sector banks like HDFC Bank, ICICI Bank, and Axis Bank were not part of the strike and continued normal operations, both at branches and through digital platforms.

The strike highlights ongoing tensions between bank employees and management over working conditions and scheduling. Customers were urged to rely on digital services where possible and exercise patience while branches gradually resume normal operations.

Union leaders stated that the strike will continue until management and government authorities address the pending demands. Meanwhile, banking authorities have assured that services will be restored promptly once discussions progress.

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Gold at ₹1,61,960, silver rises to ₹3,60,100

Gold prices in India moved marginally higher on Tuesday, continuing their firm trend in the domestic bullion market. According to market data, the price of 24-carat gold increased by ₹10, taking the rate to ₹1,61,960 per 10 grams. Silver also registered a small gain, rising ₹100 to trade at ₹3,60,100 per kilogram.

The price movement reflects steady buying interest and supportive global cues, even as daily fluctuations remain limited. In major cities such as Mumbai, Delhi, and Kolkata, 24-carat gold was largely priced at similar levels, while 22-carat gold rose to around ₹1,48,460 per 10 grams. Minor variations were seen across regions, with cities like Chennai quoting slightly higher rates.

Silver continued to trade near elevated levels, supported by both industrial demand and investment interest. In some southern markets, including Chennai, silver prices were higher than the national average, reflecting regional demand patterns.

Market experts say precious metals remain strong due to ongoing global economic uncertainty. Gold, in particular, continues to attract investors as a safe-haven asset amid concerns around inflation, interest rates, and geopolitical developments. International gold and silver prices have also been trading close to recent highs, providing support to domestic prices.

For consumers, elevated prices mean higher jewellery costs, especially during the wedding and festive season. However, traders note that small daily price changes, such as Tuesday’s increase, are part of a broader trend rather than sudden volatility.

Investors are closely watching global cues, including movements in the US dollar, interest rate signals from major central banks, and global economic data, all of which influence precious metal prices. Any sharp changes in these factors could impact gold and silver prices in the days ahead.

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US takes 10% stake in rare earth miner $1.6 bn deal

The Trump administration has moved to strengthen domestic supply chains for critical minerals by agreeing to acquire a 10 per cent stake in USA Rare Earth in a deal valued at $1.6 billion, according to media reports.

The investment is part of a broader push to expand US-based rare earth mining and processing, reduce dependence on China, and secure materials vital for defence, clean energy, electric vehicles and advanced electronics.

Under the proposed arrangement, the US government will receive equity and warrants in USA Rare Earth, alongside providing significant debt financing. Reports indicate that the funding package includes about $1.3 billion in federal loans, with the remaining amount coming through direct equity participation. The financing is expected to be supported by federal programmes aimed at strengthening strategic industries.

USA Rare Earth is developing a rare earth mine at Sierra Blanca in Texas, in partnership with Texas Mineral Resources. The project is expected to begin production by 2028 and will focus on heavy rare earth elements, which are especially important for defence and high-performance technologies.

In parallel, the company is setting up a magnet manufacturing facility in Stillwater, Oklahoma, scheduled to start operations later this year. The plant will produce permanent magnets used in electric motors, wind turbines, military equipment and consumer electronics. Together, the mine and magnet facility are designed to create a fully domestic “mine-to-magnet” supply chain.

Rare earth elements consist of 17 minerals that are critical to modern technology but are largely processed and refined in China, which currently dominates global supply. US officials have repeatedly warned that this concentration poses economic and national security risks.

The investment in USA Rare Earth marks one of the largest federal interventions in the rare earth sector so far. It follows similar government actions aimed at supporting critical mineral producers and ensuring long-term supply security.

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PFRDA reviews NPS investment rules

The Pension Fund Regulatory and Development Authority (PFRDA) has set up an expert committee to review and modernise the investment framework of the National Pension System (NPS). The move aims to strengthen long-term retirement savings, improve risk management and align NPS investments with evolving market conditions and global best practices.

The nine-member panel, named the Strategic Asset Allocation and Risk Governance (SAARG) Committee, will be chaired by Narayan Ramachandran, former India head and CEO of Morgan Stanley. The committee includes experienced professionals from the fields of asset management, capital markets and financial research.

The National Pension System is a key retirement savings scheme in India, covering government employees, private sector workers and individual subscribers. Any changes to its investment framework are expected to have a significant impact on long-term pension savings and capital market participation.

According to PFRDA, the committee’s main task is to examine the current investment guidelines of NPS and suggest changes that can enhance returns while managing risks effectively. The review will cover strategic asset allocation, diversification across asset classes, and the overall investment structure followed by pension funds under NPS.

The committee will also study governance mechanisms, risk monitoring systems and performance measurement standards. Special focus will be placed on evaluating alternative asset classes such as real estate, infrastructure investment trusts (InvITs), real estate investment trusts (REITs) and private equity, along with their valuation and liquidity norms.

In addition, the panel will assess portfolio stability, liquidity management and the role of intermediaries within the NPS ecosystem. Another key area of review is the integration of environmental, social and governance (ESG) principles into investment decisions, reflecting the growing importance of sustainable investing.

The SAARG committee has been given a nine-month timeline to complete its review and submit recommendations to PFRDA. Based on these suggestions, the regulator may revise existing NPS investment rules to provide greater flexibility, stronger governance and improved retirement outcomes for subscribers.

Other members of the committee include well-known market experts such as Raamdeo Agrawal, Kalpen Parekh, Devina Mehra and Ananth Narayan.

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Rupee slides to ₹92, raising costs for imports

Rupee fell sharply to a record low of ₹92 per US dollar on January 23, 2026, before recovering slightly to ₹91.88. Experts attribute the slide to foreign investors pulling out funds and continued strong dollar demand from importers.

This depreciation affects both households and businesses. Imported goods, particularly crude oil, electronics, and machinery, are becoming more expensive. With India importing nearly 85% of its crude oil, fuel prices and inflation are expected to rise. Families face higher costs for overseas travel and education, while Non-Resident Indians (NRIs) benefit slightly as their remittances now convert into more rupees.

Exporters stand to gain from the weaker rupee, receiving more rupees for every dollar earned. However, companies that rely heavily on imported materials may see their benefits limited. Sectors such as textiles, which are less import-dependent, are likely to benefit the most.

Looking ahead, a Business Standard poll suggests the rupee could trade near ₹92.50 per dollar by the end of March 2026 if current trends persist and foreign outflows continue. Analysts point to delays in a US‑India trade deal and ongoing global uncertainties as key factors keeping the currency under pressure.

The Reserve Bank of India (RBI) has intervened at times to curb volatility, but broader global and domestic forces continue to influence the rupee. Policymakers face the challenge of balancing currency stability with inflation control and economic growth, as households, businesses, and exporters navigate the effects of a weaker rupee.

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Canada rejects China deal after 100% tariff threat

Canada has ruled out any free trade agreement with China, after US President Donald Trump threatened to impose 100 per cent tariffs on Canadian goods if Ottawa went ahead. Prime Minister Mark Carney clarified that Canada remains committed to its North American trade agreements and has no intention of pursuing a broad pact with Beijing.

Speaking on Sunday, January 25, Carney emphasised that Canada’s limited engagement with China has focused only on resolving specific tariff disputes, not on negotiating a full-fledged trade deal. “We respect our commitments under the USMCA. We are not planning any free trade agreements with China or other non-market economies,” he said.

The remarks follow a week of tense exchanges between Washington and Ottawa. Trump’s warnings came after reports that Canada was exploring closer trade ties with China, prompting fears in the US that Chinese goods could gain easier access to North American markets through Canada.

Recent agreements with China have been narrow and targeted. Canada reduced tariffs on a small number of Chinese electric vehicles, while Beijing agreed to ease duties on some Canadian exports, including canola and seafood. These measures, Carney stressed, are far from a comprehensive trade deal.

The US threat has added strain to Canada-US trade relations, but Carney’s firm stance sends a clear message: Ottawa seeks to balance global economic ties while honouring obligations to its North American partners. Analysts say the move highlights Canada’s careful approach to diplomacy, ensuring it can engage with global markets without triggering conflicts with the US.

Also Read: India to cut EU car import duties

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India to cut EU car import duties

India is likely to sharply reduce import duties on cars coming from the European Union as part of a comprehensive free trade agreement that is close to being finalised, sources said. The proposed move would bring down tariffs from the current levels of up to 110 per cent to around 40 per cent, marking a significant shift in India’s long-standing protectionist policy for the automobile sector.

The tariff cut is expected to play a crucial role in concluding the India-EU free trade agreement, negotiations for which have been ongoing for nearly 20 years. Officials familiar with the discussions indicate that both sides are keen to seal the deal, with an announcement possible during an upcoming India-EU summit.

Initially, the lower tariffs are likely to apply to a limited number of imported cars, particularly higher-priced models. Over time, duties could be reduced further through a phased approach. European auto majors such as BMW, Mercedes-Benz and Volkswagen are expected to benefit, as high import taxes have so far restricted their sales volumes in the Indian market.

India’s government has traditionally used steep import duties to protect domestic carmakers and encourage manufacturing within the country. To balance domestic interests, the proposed agreement is expected to include safeguards, including delayed tariff cuts for electric vehicles, allowing Indian EV manufacturers time to strengthen their production base.

India is one of the world’s fastest-growing car markets, but imported vehicles make up only a small share due to high costs. A reduction in tariffs could make premium European cars more accessible to Indian consumers while increasing competition in the sector.

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India-EU trade mega deal inches closer

India and the European Union are close to concluding a comprehensive free trade agreement (FTA), marking a major milestone in bilateral economic relations after years of negotiations. The deal is expected to be announced around the upcoming India-EU Summit on January 27, 2026, subject to formal approvals on both sides, including ratification by the European Parliament.

The proposed pact is among the most ambitious trade agreements pursued by India, covering goods, services, investment, and regulatory cooperation. Bilateral trade between India and the EU stood at an estimated $136–$190 billion in 2024–25, and the agreement is expected to provide a significant boost by lowering tariffs and easing market access for businesses on both sides.

India has taken a cautious approach during the talks, drawing clear red lines around sensitive sectors such as agriculture and dairy to protect domestic producers and rural livelihoods. It has also sought gradual tariff reductions in manufacturing to prevent sudden pressure on local industries, while aiming to attract European investment and strengthen India’s role in global supply chains.

The EU has pushed for wider access for its industrial goods, including automobiles and auto components, as well as greater opportunities in services. Climate-related trade measures have emerged as a key area of negotiation, particularly the EU’s Carbon Border Adjustment Mechanism (CBAM) and sustainability standards linked to its Green Deal. India has raised concerns that these measures could function as non-tariff barriers for energy-intensive exports, while the EU maintains they are essential to ensure fair competition and meet climate goals.

If finalised, the agreement is expected to improve export prospects for Indian sectors such as textiles, apparel, leather, engineering goods, and services, while offering European firms a larger and more predictable market in India. The deal also carries strategic weight, coming at a time when global trade is increasingly fragmented and economies are looking to diversify partnerships.

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US natural gas trading hits all-time high

US natural gas markets grabbed global attention after trading activity hit a historic high at the CME Group. On a single day, more than 2.57 million natural gas contracts were traded, setting a new record and crossing the previous peak seen in 2018. This surge shows how sharply investor interest has risen as weather and supply concerns shake energy markets.

The main reason behind this jump is severe winter weather across large parts of the United States. Extremely low temperatures have increased the demand for natural gas, which is widely used for heating homes, offices, and industries. As people consume more gas to stay warm, prices tend to rise, and traders rush in to manage risks or take advantage of price movements.

Cold weather has also affected supply. In some oil- and gas-producing regions, freezing conditions disrupted production, reducing the amount of gas available in the market. This imbalance between rising demand and tight supply has made prices more volatile, prompting heavy trading in futures and options.

Natural gas prices climbed sharply over two consecutive days, posting gains of over 20 percent at one point. Many traders who had earlier bet on prices falling were forced to buy back contracts to limit losses, adding further momentum to the rally. As a result, short-term price swings became larger than usual.

Data from energy trackers showed that gas output in the Lower 48 US states dipped in January, while overall demand, including exports, rose strongly. The US remains a major exporter of liquefied natural gas (LNG), and global buyers continue to rely on American supplies, adding pressure to the market.

The impact was not limited to the US Gas prices in Europe also moved higher, as low storage levels and ongoing geopolitical tensions kept energy markets nervous. Any disruption or rise in US prices often influences global gas rates.

For investors, experts say caution is important. While high volatility can offer trading opportunities, it also increases risk. Keeping an eye on weather forecasts, storage data, and production trends will be key to understanding where prices may head next in the short term.

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