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After years of negotiations, India and the EU have reached a free trade agreement. What has been agreed?
India and the European Union have been working on a free trade agreement for years. An announcement is expected to be made at the India-EU Summit, which will take place in New Delhi on Tuesday. The following are the key elements of a trade agreement: RATIFICATION & IMPACT The pact, once signed and ratified, could increase bilateral trade and lift Indian exports, such as textiles and jewelry, which are currently subject to 50% U.S. duties since August. The fact that EU legislators voted earlier this week in favor of challenging the EU-South America Pact before the top court of the EU highlights the potential for parliamentary obstacles to delay or complicate the ratification. Separately, investment protection and geographic indications (GIs), are being negotiated, focusing the FTA on goods, services, and trade rules. WHY IT MATTERS NOW This would be India's ninth trade agreement in just four years. It reflects New Delhi's efforts to gain market access at a time when global trade is becoming more protectionist. The EU benefits from the deal because it diversifies supply chains and reduces dependence on China while also tapping India's $4.2 trillion fast-growing economy. INDIA GAINS GROWTH India is India's largest trading partner, along with the United States, China and the EU. Bilateral goods and service trade will exceed $190 billion by 2024/25. India exported $76 billion worth of goods and $30 in services to the 27-nation group. According to Global Trade Research Initiative (a Delhi-based think-tank), the average EU tariffs for Indian goods is relatively low, at around 3.8%. However, labour-intensive industries such as textiles and clothing face duties of up to 10%. The FTA will help to restore the competitiveness that was lost when the EU started withdrawing tariff concessions from the Generalised System of Preferences in 2023. This includes garments, pharmaceuticals, and machinery. It will also offset the impact of increased U.S. Tariffs. India also seeks to export IT services and professionals. GAINS FOR EU Exports of EU goods to India will face higher tariffs, with an average weighted tariff of 9.3% for $60.7 billion worth of?goods by 2024/25. Automobiles, auto components, chemicals, and plastics are subject to the highest duties. Tariff reductions would create opportunities for cars, chemicals, aircraft, machinery and other products, as well as improving access to services and procurement in one of the world's largest and fastest-growing markets. Key Sticking Points Agriculture and dairy products are excluded. India has resisted EU demands that it eliminate tariffs on over 95% of goods. It is now closer to 90%. Automobiles, wine and spirits are still sensitive. India may opt for a gradual reduction in tariffs or limited quotas instead of a sharp one, citing the risks to its domestic manufacturing. SERVICES AND RULES India wants to be "data-secured" under EU data regulations, and for professionals to move more easily. New Delhi is more flexible in areas such as labour, environment, and intellectual property. The EU wants to expand access to India's legal and financial services. INDIA'S RUBY FLAGS The EU's border carbon levy could reduce the gains in tariffs for Indian exporters. Other concerns include high non-tariff obstacles such as regulatory delays and stringent standards, and certification costs. What is next? Analysts claim that geopolitics, trade shocks and other factors have forced both sides to a pragmatic compromise. The pact's ability to deliver balanced gains depends on the final handling of carbon levies and other non-tariff barriers. (Reporting and editing by Jacqueline Wong; Manoj Kumar)
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Indian Oil replaces Russian crude with oil from Angola and Brazil as well as the United Arab Emirates, according to sources
Indian Oil Corp, the top refiner in the country, has purchased 7 million barrels from Petrobras and other suppliers for loading in March to replace Russian oil. Indian refiners have re-calibrated their strategies in order to move away from Russia as the top supplier and increase imports from the Middle East. This could help New Delhi to clinch a deal with the United States for lower tariffs. Sources said that the refiner purchased 2 million barrels Upper Zakum and 1 million barrels Murban from Shell. IOC also purchased 1 million barrels of each Angola Hungo and Clove grade from Exxon. IOC also "bought" 2 million barrels of Brazil's Buzios crude oil from Petrobras, according to the sources. The contract is optional and allows for flexibility in negotiating a deal on mutually agreeable terms. Prices were not available immediately. Due to confidentiality agreements, oil buyers and sellers usually do not comment about such deals. Trade data showed that India's Russian imports of oil fell to the lowest level for two years in December. Meanwhile, imports from OPEC countries rose 11 months. India became the largest buyer of discounted Russian crude oil after the start of the Ukraine War in 2022. However, refiners in the country reduced their Russian oil purchases in October following harsher Western sanctions against Russia's leading producers. IOC purchased Ecuadorean Oriente crude for the first and only time last month. It did this under an option supply agreement with Ecopetrol, the state oil company. (Reporting and editing by Jamie Freed; Siyi Liu, Nidhi Verma)
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What is the debt owed by Venezuela to China and why does oil play a role?
The U.S. took over Venezuela's oil imports and redirected crude barrels which were used to pay off debts owed to China. What is the debt owed by Venezuela to China and why was it paid after Venezuela defaulted? HOW MUCH DO VENEZUELA OWES CHINA? The data on Venezuela's debt are sketchy, especially since 2017, when U.S. sanctioned triggered a default. AidData, a?research laboratory at the U.S. University William & Mary that tracks lending, estimated official sector Chinese lenders extended loan commitments of $106 billion to Venezuela from 2000 to 2018. Separately they calculated that $44 billion was outstanding in 2017. Current estimates vary. Brad Parks, from AidData, said that the estimate by Societe Generale of Venezuela's outstanding Chinese debt was $10 billion. JP Morgan estimates that total obligations?of $13 to $15 billion. Parks stated that it was unclear if Venezuela had repaid the principal or only made interest payments since the default in 2017. PDVSA sources said that China had granted Venezuela a grace for capital payments for 2019. This allowed debt service payments to compensate for crude cargoes. PDVSA internal documents estimate crude oil and fuel oils exports to China to be 642,000 barrels a day. Only a fraction of this amount is used to service debt. Why is the data so patchy? Venezuela hasn't produced reliable, comprehensive debt statistics in decades. Venezuela's central bank released the last figures in 2019. It is difficult to know what debts the country owes and if it has added more. Since 2004, the International Monetary Fund (IMF), which tracks economies and debt, hasn't produced an "Article IV report" on Venezuela. Outside observers are left to piece together information using public statements by Venezuelan officials, sourced data, and the movements of crude exports, which is Venezuela's primary source of revenue. How was China still getting paid after default? Venezuela's main allies after U.S. sanctions had been imposed were Russia and China. AidData's Parks stated that most of Venezuela's debts to China are contracted through oil-backed loans with China Development Bank. Parks stated that the cash proceeds from some of the oil shipped to China went to a Beijing controlled account, and then on to service debts, even though sanctions?and default prevented many other creditors from being paid. IS THERE ANOTHER WAY TO REPAIR CHINA? The United States said that it would funnel the proceeds from Venezuelan oil sales to a 'Qatar account, which it controls. Washington will then have to send money to China to 'keep servicing the debt. This is not likely, as the Trump administration has stated. CNPC is China's largest oil company and it also has assets in Venezuela. Sinovensa, its largest joint venture with PDVSA, pumps around 110,000 barrels of oil per day. Uncertain is how the U.S. plans to handle these cargoes. Bondholders and other creditors are also pushing their cases in the auction for Venezuela's most valuable asset abroad - the U.S. refinery company Citgo. China will not be involved in the auction due to Citgo's location within the United States.
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US control over Venezuelan oil could lead to a showdown with China on debt restructuring
The U.S.'s control over Venezuela's oil exports ensnared the barrels that were servicing debts to China. This could lead to another showdown between two superpowers, which would further complicate the South American nation's path towards avoiding default. Venezuela's $150billion foreign debt is believed to be a tenth loan from China, which the OPEC country was paying with oil cargoes – until the U.S. seized Venezuelan president Nicolas Maduro this month. Experts in debt said that the impact of China's claim to the cargoes?and?any conflict with the United States?could make it harder for Venezuelans to restructure their debts after a default in 2017 and could put Beijing's collaboration on restructuring deals at risk for other developing countries. Even under the best circumstances this was going be messy. Trying to figure out where these creditors stood in the credit hierarchy, said Christopher Hodge. He is the chief economist at Natixis, and a former U.S. Treasury Official. Hodge stated that "the fact that America controls all finances in and out of the nation...seems to be unprecedented for me. We're going have such entanglements. Such opacity regarding the finances of a Government." Hodge pointed out that Venezuela's primary source of income is oil sales proceeds. Documents and sources of the state-run oil company PDVSA reveal that three supertankers were shuttling back and forth between Venezuela and China in the past five years, carrying oil to pay interest under the terms and conditions of a temporary deal struck in 2019. These shipments represent only a small fraction of Venezuela’s total crude oil exports to China. AidData, a lab of the U.S. University William & Mary which tracks lending, reported that some cash proceeds were sent from Venezuela to China and went to a Beijing-controlled account to pay off the debt, even though sanctions and defaults prevented payments to other Venezuelan creditors. Trump's administration now says that the proceeds of the sale Venezuelan oil will be sent to a Qatari account controlled by Washington. This could give the U.S. president himself considerable?leverage in deciding which creditors are paid and when. China's Foreign Ministry responded to a question about the cargoes, debts and payments by saying that Beijing had "repeatedly stated its position". Beijing has condemned the redirection Venezuelan oil exports at a?January 7th news conference. It added that "legitimate interests and rights of?China, and other countries of Venezuela in Venezuela should be protected". Taylor Rogers, White House spokesperson, said that Trump had negotiated an oil deal with Venezuela which "will benefit both the American and Venezuelan public". A U.S. official confirmed on Thursday that the Trump administration has allowed China to buy Venezuelan crude oil, but not at "unfair and undercutting" prices, as Caracas had previously sold it. The traders who manage Venezuelan oil sales offered some to Chinese refiners. However, these were private market transactions and not meant as debt repayments. The official from the United States said, "The people in Venezuela will receive a fair price from China and other countries for their oil." The Venezuelan Communications Ministry, which is responsible for all government press inquiries, did not respond immediately to a comment request. Other Options Trump may still strike a deal with China. Restructuring advisors warn that the planned U.S. control over Venezuela's oil sector and its revenues could upset the hierarchy of creditors. Lee Buchheit, a global sovereign debt expert, said that "all of these things" would have the effect of subordinating claims by legacy debt holders. He added that it was unclear whether Trump had the legal authority to decide who got paid first. Venezuelan bonds worth $60 billion went into default in 2017. A restructuring agreement will be needed to allow Venezuela to borrow money again and attract investment. In a typical restructuration, bilateral lenders get together to decide what losses they are willing to accept. This is usually done via the Paris Club, a group of creditor nations. The "comparable" loss threshold is set by the Paris Club of creditor?nations. Mark Walker, an experienced sovereign debt advisor, who worked previously on possible Venezuelan restructurings, said that "Comparability will be a challenge", particularly if the U.S. controls how oil revenues are used. Pushing China If the U.S. forces China to accept significant debt writedowns, and China refuses, it could slow down a restructuring process and even hinder Venezuela's recovery. This could keep Venezuela in "very dire straits for the foreseeable future", according to Jean-Charles Sambor of TT International. The company holds Venezuelan bonds. This would then limit the amount of money that Venezuela can afford to pay back to its bondholders and creditors. China has limited immediate leverage. Countries ?typically do not take other nations to court or arbitration over lending claims, Walker said, and would need to settle the situation "on a government-to-government basis". China has had a major impact on the world's developing countries. It is the biggest bilateral lender in the region and its cooperation with Paris Club was crucial for the last decade. Beijing reached a restructuring agreement via a platform known as the Common Framework, during Ghana's, Zambia's and Ethiopia’s debt restructuring discussions. Buchheit stated that "China's obvious lever is to refuse to participate in future Common Framework sovereign bond workouts until it feels it has been treated fairly by Venezuela." This threat would be very powerful.
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The dollar is cooled by Trump's Arctic pantomime in the morning bid for Europe
Tom Westbrook gives us a look at what the future holds for European and global markets. The Bank of Japan only did enough to keep the yen stable in the Asia session. They also boosted inflation forecasts, but this didn't deter the market from expecting two rate hikes for the year. Dollar was also under pressure in general as investors may have anticipated that the Greenland drama of the past week will make the U.S. less attractive as an investment destination. The world's net long U.S. positions total $27,6 trillion. This leaves a lot of room to trim. After retracting tariff threats, President Donald Trump claimed that he had secured permanent and total U.S. access in Greenland through a deal reached with?NATO. The head of the alliance said that allies must increase their commitment to Arctic security. The European Union leaders breathed a huge sigh and said that they wanted a trade agreement between the EU and USA to get back on track. However, they warned that they would be ready to take action if Trump threatened them again. In a major speech delivered at Davos, Canadian Prime Minister Mark Carney criticized powerful nations for using tariffs and economic integration as weapons. The stock market in Asia was up, but a 'after-hours plunge in Intel shares indicated a brewing strain in the chip supply chains. The company claimed it was unable to meet the demand for its server chips used in data centres, and its stock fell 13%. China raised its official yuan guide to the higher side of?7 per dollar for the first since 2023. This is lower than the market's expectations, but it is seen as a tacit endorsement. The following are key developments that may influence the markets on Friday. - PMIs for Europe and the U.S. - U.S. consumer sentiment
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Gold, silver and Platinum extend record-breaking rally
Gold reached another record-high on Friday. Silver and platinum also extended their gains to reach all-time highs, fueled by a?diminishing? confidence in U.S. investments due to geopolitical tensions, and economic uncertainty. As of 0358 GMT spot gold was up by 0.3% to $4,951.91 an ounce after reaching a record high earlier in the day. U.S. Gold Futures for February Delivery increased by 0.8% to $4.952.80 an ounce. "Faith In The?U.S. Its assets are shaken and may be permanently. This is causing money to flow into precious metals. The word rupture is being thrown about. "I don't believe that's an overstatement,"? said Kyle Rodda a senior analyst at Capital.com. Dollar index fell to a two-week-low on Friday after falling 1% during the week. This made metals priced in greenbacks more affordable for overseas buyers. The EU leaders breathed a huge sigh after Donald Trump reversed his position on Greenland. They met in Brussels for an emergency meeting late Thursday night and warned that they were ready to take action if Trump threatened them again. According to the U.S. President, he has secured a permanent and total?U.S. A deal between NATO and Greenland allows access to the island. Details of any agreement remain unclear, and Denmark has insisted that its sovereignty over the Island is not up for discussion. Silver spot jumped 2.6%, to $98.71 per?ounce after reaching a record high earlier of $99.20. Rodda said that the silver story is a tale of outperformance compared to gold, and its industrial applications. Markets expect?the Fed to deliver two quarter-percentage-point rate cuts in 2026's second half, increasing the appeal of non-yielding Gold. Palladium fell 0.9%, to $1,903.10, after reaching a record high of $2,684.43 per ounce earlier. Spot platinum rose 0.4%, to $2,639.40 an ounce, following a record-high $2,684.43 per ounce. (Reporting by Ishaan Arora in Bengaluru; Editing by Subhranshu Sahu and Ronojoy Mazumdar)
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Asia stocks soar after Bank of Japan holds rates
Stocks rose?in Asian trade on Friday, after the Bank of Japan held the benchmark interest rate. Gold and silver also surged to new highs as the U.S. Dollar came under renewed pressure. The Nikkei gained 0.3%, while MSCI's broadest Asia-Pacific share index outside of Japan was up 0.5%. S&P 500 futures traded between gains and losses. They were up 0.2%. After the BOJ decision, the yen fell 0.1% to the dollar. It was last trading at 158.61 per dollar. David Chao is the global market strategist at Invesco Singapore. He said that "the tone appears hawkish." The BOJ raised four out of six inflation forecasts, and said that if the forecasts come true, further rate increases are likely. The statement did not comment on the recent volatility of Japanese government bonds. Chao said that it is "clear" that the Takaichi government is closely monitoring the bond markets and is worried about the recent meltdown. It would be comforting to see BOJ show the same level of attention. At 3:30 pm local time (0630 GMT), BOJ Governor Kazuo Ueda is scheduled to hold a press conference in order to explain his decision. In the early trading session, data from the government showed that Japan's consumer prices increased?2.4% over a year ago in December, which was in line with analyst's estimates. Wall Street stocks extended their recovery for a second consecutive day on Thursday after U.S. president Donald Trump backed down from earlier threats to impose tariffs on European goods and denied the possibility of taking over Greenland militarily. The S&P 500 rose 0.5%, and the Nasdaq Composite gained 0.9%. In a report, analysts at Societe Generale stated that "markets have welcomed this shift with a rebound of risk assets as well as a flattening?of yield curves for government bonds." However, policy uncertainty is still high. "There are more twists and turn to come." The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, last rose 0.1% to 98.38. It was hovering around its lowest levels for the year, after Thursday's biggest one-day drop in six weeks. Fed funds futures indicate a 96% implied probability that the U.S. Federal Reserve is likely to keep rates unchanged at its next 2-day meeting, scheduled for January 28. This was little changed from one day prior. The yield of the 10-year Treasury Bond in the United States was down 1.2 basis point at 4.237%. The dollar sank to its lowest levels of the year, and precious metals markets broke new records. Silver was up 2.8% to $98.88 an ounce. Gold rose for a fifth consecutive day, climbing by 0.1%?to $4943.43 an ounce. Platinum also reached new heights. Kyle Rodda, senior analyst at Capital.com Melbourne, said that the dollar's weakness was due to a decline in U.S. prestige and credibility. He added that the rise in gold was the opposite of the decline in U.S. prestige. There are many factors that drive gold. The main reason for the gold price this week was the decline in?trust' in the U.S. South Korean stocks led Asia's gains, with the KOSPI rising 0.9% for the third consecutive day. Thursday marked the first time that the?index had crossed the 5,000-mark, a landmark President Lee Jae Myung promised to achieve through market reforms as well as tax measures in order to close the "Korea Discount". The gains in the tech-heavy index were attributed to Intel's Thursday announcement that its quarterly revenue and profits would be below expectations. The U.S. Chipmaker has been struggling to meet demand for server processors used in AI data centers, which caused its shares to drop 11% after-hours. Brent crude futures last rose 0.9% to $64.61 per barrel. This was after Trump's more lenient tone toward Greenland, Iran, and other geopolitical threats eased concerns about disruptions in supply. Bitcoin rose 0.7% to $89 817.64 while Ether was up 0.6% last at $2 961.52. (Reporting and editing by Christian Schmollinger, Jacqueline Wong and Gregor Stuart Hunter)
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Copper rises after Chilean mine strike
Copper prices rose on Friday as supply concerns grew after Capstone Copper, a miner in Chile and a local trade union reported that a strike had forced the company to halt production at its Mantoverde Mine. As of 0330 GMT, the most traded copper on the Shanghai Futures Exchange had risen?0.32%, to 101,020 Yuan ($14,507.49), a metric tonne, but was expected to end the week with a loss of 1.15%. The benchmark copper for three months on the London Metal Exchange rose 1.01%, to $12.884.50 per ton. The strike was triggered after Capstone and the largest union at the mine failed to reach an agreement on collective bargaining. Production stopped, with the mine expected to produce between 29,000.00?and 32,000.00 metric tons copper cathodes by 2025. Freeport-McMoRan, a copper miner, said that they expect?about 85%? of their flagship Grasberg Mine, the second largest copper mine in the world, to come back online 'by the second half this year. In October 2025 a deadly mudslide killed several miners and closed the mine, causing?supply concerns and triggering a rally in copper. The weakened?U.S. dollar. The dollar index registered ?its biggest one-day fall in six weeks on Thursday, making greenback-denominated commodities cheaper for investors using other currencies. Greenland anxiety also diminished after U.S. president Donald Trump withdrew tariff threats against European products and denied taking Greenland over by force. Tin and nickel were the top gainers on the London and Shanghai stock exchanges. Indonesia's recent move to reduce nickel ore mining quotas for 2026, as well a military-backed crackdown against illegal mining activities continue to unnerve industry. The Shanghai nickel rose 3.17% to 146,840 Yuan, while the most active tin on SHFE increased by 4.22%. London benchmark tin increased by 3.50%, to $53,695 per ton. Nickel rose by 2.86%, to $18,510. Aluminium, among other SHFE base-metals, rose by?0.85%. Zinc gained 0.92%, and lead suffered a 0.15% loss. LME Aluminium added?0.21%. Zinc rose 0.73%. Lead was up by 0.25%. Friday, January 23, DATA/EVENTS - (GMT) 0700 Retail Sales UK MM, YY Dec 200745 France Business climate Mfg Overall Jan 0815 France HCOB Mfg Svcs Comp Flash pmIs 01 0830 Germany HCOB Mfg Svcs Comp Flash pmIs 0900 EU HCOB Mfg Svcs Comp Flash - PMIs 0930 UK HCOB Svcs Comp Flash - PMIs 0930 Flash Jan: Japan JP BOJ rate decision 23 Jan
After Trump's comments about an 'armada moving to Iran', supply concerns have prompted a rebound in oil prices
The oil prices rose on Friday, after U.S. president Donald Trump renewed his threats against a major Middle Eastern producer in?Iran. This sparked fears of military action which could disrupt supply.
Brent crude futures for the month of March increased by 35 cents or 0.55% to $64.41 per barrel. U.S. West Texas Intermediate Crude rose 33 cents or 0.56% to $59.69 per barrel at 0243 GMT.
Both contracts fell by about 2% Thursday. After Trump informed reporters on Air Force One that the U.S. had an "armada", heading towards Iran, he hoped not to have to use this weapon. He also warned Tehran against resuming its nuclear program or killing protesters.
A U.S. official announced that warships, including an aircraft carrier as well as guided missile destroyers, will be arriving in the Middle East within the next few days. Iran is the fourth-largest producer of oil in the Organization of Petroleum Exporting Countries. It also exports a lot of oil to China, the world's second largest consumer of petroleum.
Brent and WTI will gain 0.6% in the coming week after the prices rose earlier this week due to Trump's threats of invasion Greenland. This could destabilize the trans-Atlantic Alliance. However, they dropped on Thursday when he backed off any military action.
Trump has retracted his statement that Denmark, which controls Greenland, NATO, and the U.S. have reached an agreement to allow "total acces" to Greenland.
Prices also'softened' on Thursday after bearish government data showed that stockpiles of oil in the U.S. - the world’s largest?oil consumer - grew last week due to a slowdown in fuel demand.
U.S. Energy Information Administration released data on Thursday that said "crude inventories increased by 3.6 millions barrels during the week ending January 16". This was more than the analysts' polled prediction of a 1.1 million-barrel increase.
The API trade group, according to market sources, reported a 3-million barrel build on Wednesday.
The U.S. Martin Luther King Jr. holiday fell on Monday, so both agencies released their reports one day later than normal. Helen Clark (Reporting; Christian Schmollinger, Editing)
(source: Reuters)