Trump announced a massive U.S.āIndia trade deal that sent markets soaring. The only problem? India hasnāt confirmed it.
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Macro
Oil Minister Hardeep Puri signaled that Russian oil imports would drop below 1.3 million barrels per day. There is no government mandate and Puri says companies are working on their own due to market forces; India now buys oil from 41 different sources, the most diversified it has ever been.Ā Ā
The EU's auto export quota is 6x larger than the previous largest given to the UK.About 160,000 combustion engine cars will see tariffs fall to 10 percent within 5 years and 90,000 electric imports will as well. Most other quotas will be around 30 percent though periodic reviews can allow both parties to reassess progress. The EU is eliminating quotas on up to 625,000 imports to reflect the size of both markets.
Equities
Air India is ordering 30 more Boeing Max jets lifting total orders placed at 250. The Tata Group is investing heavily in revamping Air Indiaās image while handling growing domestic air demand. Total orders now stand at 500 jets from Airbus and Boeing, split evenly.Ā
Potential South African auto tariffs threaten Maruti Suzuki and Hyundai India. The companies see 5 percent and 4 percent of their sales respectively from the country and could face 50 percent quotas. Auto stocks as a whole are down 5 percent this year already.Ā
Derivatives trades point to bullish bets on finance stocks after the Budget. Long positions in the Nifty Bank Index are up 10 percent using options expiring in the month of February after 2 straight months of bearish bets.Ā
Smaller firms in faster growing sectors like telecom, metals, and financials are seeing more long positions than typical Indian heavyweights. Part of this is recent trends like precious metal appreciation while others like financials are a longer-term view on India. Large consumer staples and tech services are now being rotated out of.Ā
Mid-cap stocks in the NSE MidCap 150 Index rose to a 16.4 percent gain last year, far outstripping the broader market. Global funds have shifted out of larger companies and back into smaller ones now that they trade at more favorable multiples.Ā
In tech and media, NDTV reported a wide loss while Vodafone plans an expansion.NDTV suffered a quarterly loss of $8.8 million (ā¹802.5 million) from slowing subscriptions while Vodafone wants to invest $4.9 billion (ā¹450 billion) over the next 3 years for a network rollout.Ā Ā
Alts
SeaTown Credit, a unit of Temasek, is expanding its private credit presence in India. It recently closed a third international fund of $900 million (ā¹172.3 billion) and is planning on investing a portion in India. The nation still lags behind the global $1.7 trillion (ā¹155.4 trillion) private credit market relative to its size.
Policy
Modi announced an oil drilling expansion to bring refining and production on-shore. He expects opening up restricted areas to bring $100 billion (ā¹9.2 trillion) of investments (domestic and foreign) and to add 1 million barrels of refining capacity to the current 6 million that India boasts. Imports currently account for 90 percent of oil needs and 50 percent of gas needs. Ā
Russia is having to rethink its oil strategy due to India's under reliance on imports. The number of ships being diverted to China or floating off the coast of Oman has grown rapidly to 140 million barrels. The build-up of oils at sea has been 60 million since August. Total export value a week is still $920 million (ā¹94.1 billion), greatly helping the war against Ukraine, but slowing exports damages that windfall.Ā
India's Goa Energy Week saw India and Canada draw deeper ties with energy trade.India will supply more refined petroleum products while Canada will export LNG, crude, and liquified petroleum gas. Canadian Energy Minister Tom Hodgson said Canada needs to diversify its trade partners and wants to expand collaboration on alternative energy and AI use.
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Trade...Deal?
Monday evening saw a shock announcement with Trump claiming that the US has struck a sweeping trade deal with India. While something very beneficial for India ā stocks improved by 2.5 percent and the rupee by 1.6 percent ā the announcement generated more confusion than clarity. Trump said tariffs on Indian goods would be cut from 50 percent to 18 percent after New Delhi agreed to stop buying Russian oil, presenting the move as a breakthrough at the end of his first year of aggressive trade action. Indian officials, however, have been far more circumspect, stopping short of confirming key elements of the agreement he described.
According to Trump, Modi committed not only to halting Russian oil imports but also to eliminating Indian tariffs on US goods and sharply increasing purchases of American energy to the tune of $500 billion (ā¹45.5 trillion). He also claimed India would import more agricultural and industrial products. Modiās own public remarks told a narrower story. He welcomed the reduction in US tariffs on Indian exports but avoided any mention of oil, tariff elimination, or large-scale import commitments, instead praising Trumpās leadership in general terms. That gap has fueled skepticism among economists and opposition politicians in India, who say no formal agreement appears to have been signed.
The US is Indiaās largest trading partner, with bilateral trade of about $129 billion (ā¹11.7 trillion) last year, and India runs a sizable surplus. Trumpās claim that India would buy more than $500 billion (ā¹45.5 trillion) in US goods has been widely questioned, given that the figure approaches the scale of Indiaās entire annual federal budget and is 13 percent of the GDP. Analysts also warn that opening sensitive sectors such as agriculture could provoke significant domestic backlash, particularly after years of farmer protests that forced Modi to retreat on earlier reforms.
Politically, the announcement has drawn sharply divided reactions. Senior figures in Modiās government have hailed the understanding as historic, while opposition leaders accuse the prime minister of conceding too much without transparency. Until a joint statement or signed text emerges, markets and policymakers are left parsing statements that point in different directions. For now, the so-called deal looks less like a settled trade pact and more like a tentative reset in a relationship still shaped by mistrust and power politics.
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Written by Yash Tibrewal. Edited by Shreyas Sinha.
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