CNBC Daily Open: The EU-India trade deal story is not over yet

On Tuesday, India and the European Union announced a “landmark” free trade deal that would remove or reduce tariffs on more than 90% of goods traded between them. 

The deal, nearly two decades in the making, will see India lower tariffs in two of its most politically sensitive sectors, agriculture and autos. It also lands amid a growing wave of bilateral trade agreements, as countries recalibrate supply chains and commercial ties in response to Washington’s increasingly muscular use of tariffs.

That broader shift is already visible. Earlier this month, Canadian Prime Minister Mark Carney visited China, the first leader in his role to do so in 17 years, in a bid to expand economic partnerships with the world’s second-largest economy. UK Prime Minister Keir Starmer is set to follow with a three-day trip to China, the first by a British prime minister since 2018.

Still, the India-EU pact, memorably dubbed the “mother of all deals” by European Commission President Ursula von der Leyen, has yet to clear its most unpredictable hurdle: U.S. President Donald Trump.

Trump, who has slapped punitive tariffs on friends and foes alike, has yet to weigh in on the India-EU agreement. His silence is notable.

In August last year, the U.S. imposed higher levies on Indian goods over India’s oil purchases from Russia, days after imposing a 25% duty on New Delhi.

With Trump’s recent escalating rhetoric toward the EU, including threats tied to Greenland, his response looms as a persistent cloud over the “historic” deal. And that cloud darkened further when U.S. Treasury Secretary Scott Bessent criticized the EU for forging a trade agreement with India in an interview with ABC News on Sunday.

But perhaps it’s not all doom and gloom, as the U.S. and India are at “a very advanced stage” of finalizing a highly-anticipated deal, India’s Minister of Petroleum and Natural Gas Hardeep Singh Puri told CNBC Tuesday. 

Another cloud weighing on investors’ minds is the U.S. Federal Reserve, which concludes its policy meeting Wednesday. Rates are widely expected to remain unchanged, but Chair Jerome Powell’s remarks will be closely parsed amid renewed political pressure on the central bank.

U.S.-India trade deal on the cards? Both countries are at “a very advanced stage” of finalizing an agreement, India’s Minister of Petroleum and Natural Gas Hardeep Singh Puri told CNBC Tuesday.

S&P 500 closes at a record. On Tuesday stateside, the benchmark rose to a new all-time intraday high on gains in Big Tech, ahead of key earnings from companies in the sector. The Nasdaq Composite also climbed, but the Dow Jones Industrial Average fell. European stocks ended higher after the EU-India trade deal was announced. 

A partial U.S. government shutdown. That looks possible beginning early Saturday, largely due to strong Senate Democratic opposition to funding for the Department of Homeland Security and other agencies, after the second recent killing of a U.S. citizen by federal agents in Minneapolis. 

Anthropic seals funding round above $10 billion target. The AI company closed a funding round totaling between $10 billion and $15 billion, led by Coatue and Singapore sovereign wealth fund GIC, according to sources familiar with the discussions. 

[PRO] Two ways to play the energy sector. A technical and fundamental scan of this energy ETF shows it could break a significant resistance level and hit new all-time highs.

The India-EU free trade agreement would see India reduce tariffs on European automobile and agricultural products, while the EU would do the same for Indian textiles, leather, marine products and gems and jewelry.

India is the EU’s ninth-largest trading partner, accounting for 2.4% of the bloc’s total trade in goods in 2024, far behind major partners like the U.S. (17.3%), China (14.6%), or the U.K. (10.1%). But the EU is one of India’s largest trading partners, rivaling the U.S. and China.

— Priyanka Salve