India-EU trade deal: India and the European Union are still ironing out the finer points of a trade deal just days before European leaders are set to arrive in India for the 16th EU–India Summit.
The summit, scheduled for January 27, will focus on a long-pending Free Trade Agreement that has been under discussion for over two decades and remains challenging to conclude due to sensitivities surrounding agriculture, carbon border levies, services, and non-tariff barriers.
Market participants and investors are likely to closely monitor developments around the India–EU trade deal in the coming week, as it is expected to play a crucial role in shaping the direction of the Indian stock market.
On Friday, the Indian benchmark indices witnessed sharp selling pressure during the week, with the Nifty 50 declining more than 2.5% to settle at 25,048, while the BSE Sensex fell nearly 2.4% to close at 81,537.
India-EU trade deal: What do we know about the deal so far?
The India–European Union free trade agreement (FTA), slated for announcement on January 27, is expected to reduce costs and boost bilateral trade without undermining domestic industry, according to the Global Trade Research Initiative (GTRI), as quoted by the Times of India.
India–EU merchandise trade exceeded $136 billion in FY2025. GTRI noted that tariff cuts under the pact would mainly lower input costs, strengthen value-chain integration and lift trade volumes—typical FTA benefits that support producers and consumers on both sides.
” The two are not rivals but partners operating on different rungs of the value chain,” with India focused on labour-intensive and downstream production, while the EU supplies capital goods, advanced technology and industrial inputs. This structural complementarity explains why an India-EU free trade agreement is likely to lower costs and expand trade rather than threaten domestic industry,” Ajay Srivasatava, GTRI founder, was quoted as saying by TOI.
Indian exports to the EU, such as smartphones, apparel, footwear, tyres, pharmaceuticals, auto components, refined fuels and cut diamonds, largely substitute the EU’s imports from other countries rather than compete with European manufacturing, much of which has already been offshored. Meanwhile, the EU supplies India with high-end machinery, aircraft, key electronic components, chemicals, advanced medical devices and metal scrap.
India-EU trade deal: How it will impact Indian stock market, gold and silver prices?
Indian stock market
According to Sandeep Pandey, Co-founder of Basav Capital, the Indian stock market is likely to see a gap-up opening on Tuesday, January 27, highlighting that India-EU trade deal optimism is expected to fuel business volume of export oriented companies.
Pandey further explained that the trade deal is expected raise US dollar inflow leading to appreciation in Indian Rupee. The Rupee hit all-time low of 92 per dollar on Friday, however, recovered marginally to settle at 91.88.
The India-EU trade deal is also likely to benefit export oriented companies. “This is expected to raise US dollar inflow leading to appreciation in Indian Rupee. So, export oriented companies are expected to report better earnings in upcoming quarters. Appreciation in rupee will fuel demand in consumer durable segment,” Pandey said.
Gold and silver prices
Meanwhile, gold and silver prices are likely to continue its bullish trend in the coming week, according to market experts.
Anuj Gupta, Director, Ya Wealth Research & Advisory, believes that both precious metals may witness a mild correction in the near term, but the broader outlook for both metals remains bullish over the long run.
“ Gold is expected to continue its role as a key safe-haven asset amid ongoing global uncertainties, while silver demand is likely to stay resilient, supported by its dual appeal as both a precious and industrial metal,” Gupta said.
On the technical outlook, Gupta said that Gold is trading with key support seen at ₹1,52,000 ($4,930), followed by a stronger base at ₹1,48,000 ($4,870). On the upside, immediate resistance is placed at ₹1,60,000 ($5,020), with a higher hurdle at ₹1,65,000 ($5,080).
Meanwhile, Silver has support at ₹3,25,000 ($98), with the next downside level at ₹3,15,000 ($93). Resistance for silver is seen at ₹3,40,000 ($105), and a decisive move above this could open the door toward ₹3,50,000 ($110).
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.