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Beyond

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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Beyond

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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Beyond

India-EU on the verge of a game-changing deal

Negotiations between India and the European Union are moving steadily toward a landmark free trade agreement. Ursula von der Leyen, European Commission President, described the prospective pact as historic, with wide-reaching benefits for businesses, workers, and consumers in both regions.

The agreement would connect nearly 2 billion people and cover about a quarter of the world’s GDP. It is expected to make it easier for Indian companies to enter European markets while giving European businesses greater access to India’s growing economy. Key areas include clean technologies, digital services, healthcare, and sustainable manufacturing.

Von der Leyen is expected to visit New Delhi later this month to finalise talks ahead of the India-EU summit, where progress toward signing the deal is likely to be formally announced. Leaders emphasised that political momentum is strong, although challenges such as tariffs, regulatory differences, and sensitive sectors remain to be resolved.

The India-EU trade talks, which began in 2007 and were revived in 2022, aim to deepen economic cooperation and remove barriers in goods, services, and investment. Observers say a successful agreement would be a major boost for Indian exporters and European investors alike, strengthening the long-term partnership between the two regions.

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Corporate

EU and Mercosur seal major trade deal

The European Union (EU) and the Mercosur bloc of South American countries have signed a historic free trade agreement, ending more than 25 years of negotiations. The deal, signed on January 17, 2026, in Paraguay, is expected to create one of the world’s largest trade zones, connecting over 700 million people and boosting economic ties between the two regions.

Mercosur includes Argentina, Brazil, Paraguay, and Uruguay. Bolivia is not part of the deal yet, and Venezuela remains suspended from the bloc. The agreement aims to gradually remove most tariffs on goods traded between the EU and Mercosur, including cars, machinery, and chemicals. This is expected to save businesses billions in customs fees and make products cheaper for consumers.

European Commission President Ursula von der Leyen called the deal a choice for “fair trade over tariffs,” highlighting its importance for Europe’s global trade strategy. Argentina’s President Javier Milei also welcomed the pact, viewing it as a boost for free trade and economic growth.

The agreement still needs approval from the European Parliament and the national parliaments of Mercosur countries before it comes into effect. Some European farmers and environmental groups have expressed concerns, fearing that cheaper imports could hurt local agriculture and worsen environmental issues, like deforestation. To address this, the deal includes quotas and safeguards, and the EU has promised support for its farming sector.

Supporters say the pact is not just about trade—it also strengthens political and economic ties between Europe and South America. Analysts note it could serve as a model for other large trade agreements in a time of rising global protectionism and supply chain challenges.

Once fully implemented, the EU-Mercosur deal is expected to increase exports, lower costs for consumers, and encourage investment in industries across both regions.

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Beyond

Reliance gets one-month US nod for Russian oil

Reliance Industries Ltd (RIL) has received a one-month concession from the United States that allows it to continue receiving crude oil cargoes supplied by Russia’s state-owned oil major Rosneft. The temporary approval comes even as the US tightens sanctions on Russian energy companies following the Ukraine conflict.

The concession enables Reliance to take delivery of oil shipments that were contracted before fresh sanctions came into force. These are not new purchases but cargoes linked to existing agreements that are being gradually wound down in line with regulatory requirements, according to sources familiar with the matter.

In October, the US imposed sanctions on major Russian oil producers, including Rosneft and Lukoil, and asked companies to end transactions with them by November 21. However, the one-month waiver allows Reliance to continue receiving some Rosneft supplies beyond that deadline. Since November 22, the company has reportedly received around 15 cargoes of Russian crude under earlier commitments.

Reliance has a long-term supply agreement with Rosneft for about 500,000 barrels of crude oil per day. This oil is mainly used at its Jamnagar refining complex in Gujarat, which has a total capacity of about 1.4 million barrels per day and is among the largest refinery hubs in the world.

To manage sanctions compliance, Reliance has adjusted how it processes Russian crude. The company has said that Russian oil received after November 20 is being refined at its domestic-focused refinery unit. Fuel exports, especially to Europe, are being produced using non-Russian crude to meet European Union rules.

From January 21, the EU will not accept fuel made at refineries that have processed Russian crude within the previous 60 days. To avoid disruption to exports, Reliance has stopped using Russian oil at its export-oriented refinery in the Jamnagar Special Economic Zone and is sourcing alternative crude grades.

India has been a major buyer of Russian oil since the start of the Ukraine war, taking advantage of discounted prices. However, India’s imports of Russian crude are expected to decline in December as refiners respond to tighter sanctions and changing trade rules.

The US Treasury has not officially commented on the concession granted to Reliance.

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Beyond

Ukraine to get €90B EU loan, Russia excluded

The European Union has agreed to provide Ukraine with a €90 billion financial support package, marking one of the largest commitments to Kyiv since the Russian invasion began. The decision, reached after intense negotiations among EU leaders, is aimed at helping Ukraine sustain its defence operations and government spending into 2026.

The package, structured as loans rather than grants, was agreed without tapping into frozen Russian state assets. Some EU member states had pushed to use the seized funds, arguing it was a practical source of financing. However, others raised concerns over legal hurdles and potential diplomatic fallout, leading to a compromise that excludes Russian assets.

European leaders described the deal as a critical signal of unity and continued support for Ukraine, but stressed that the implementation and transparency of fund disbursement will be essential. The agreement also reflects differing views among EU countries on fiscal responsibility, risk-sharing, and long-term aid strategies.

Ukrainian President Volodymyr Zelenskyy welcomed the EU decision but stressed that speed is crucial. “This support is vital, but timing is everything. Ukraine needs predictable and immediate aid to continue defending its people and economy,” he said. Ukrainian officials have repeatedly highlighted that delays in funding could affect both military operations and essential government services.

The EU loan is expected to provide short-term financial stability while negotiations continue over additional aid and post-war reconstruction. The formal approval by EU institutions and the coordination among member states will determine the pace of disbursement. EU officials emphasized that the funds must be delivered efficiently to have the intended impact, both for Kyiv’s defence needs and economic stability.

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