Happy Wednesday and welcome to your morning wrap of the latest political and business news from around the world.
First up this morning, India and the European Union have reached a free trade agreement to deepen economic and strategic ties, the Associated Press reported.
The head of the EU’s executive branch, Ursula von der Leyen, has described the deal as the “mother of all deals”, as it could affect as many as two billion people.
The accord will see free trade on almost all goods between the EU’s 27 members and India, and covers everything from textiles to medicines. It will also bring down high import charges for European cars and wine. The agreement is expected to cut up to US$4.7 billion ($7.8b) in annual tariffs for exporters and create jobs for millions of workers.
India has excluded dairy products such as milk and cheese from the deal, along with cereals, citing “domestic sensitivities”.
There is also a framework for deeper defence and security co-operation, alongside a separate pact aimed at easing mobility for skilled workers and students.
Indian Prime Minister Narendra Modi, speaking at a virtual conference, said the agreement would bring major opportunities for the people of India and Europe. “It represents 25% of the global GDP and one-third of global trade.”
European Commission president Ursula Von der Leyen.
As CNBC reported, all eyes are now on how Donald Trump will react to the free trade deal, which is widely seen as a hedge against the US’s volatile trade policies and tariff threats.
The US President is yet to react to the deal, which was announced in the early hours of Tuesday morning European time. However, Treasury Secretary Scott Bessent has already criticised the arrangement, after the US hit India last year with a further 25% tariff on Indian goods for its purchase of discounted Russian oil.
European stocks ended the day broadly higher on the back of the deal, while both the euro and the pound sterling firmed overnight.
In other news, the Financial Times reported that the Trump administration has indicated to Ukraine that US security guarantees will depend on Kyiv first agreeing to a peace deal that would likely involve ceding the Donbas region to Russia.
The report, which is sourced from eight people the FT spoke to who are familiar with the talks, said Washington also suggested it would promise Ukraine more weaponry to bolster its peacetime army if it agreed to withdraw its forces from the eastern region it controls.
Ukraine President Volodymyr Zelensky had hoped to lock up security agreements and a post-war “prosperity plan” with the US as early as this month, which would give it leverage in future talks with Moscow. But Washington is now signalling that US security commitments depend on reaching an accommodation with Russia.
Volodymyr Zelensky.
Staying with the US, Trump’s border czar is set to take over the president’s sweeping immigration operation in Minneapolis, as the White House tries to dampen national outrage over the second fatal shooting of a US citizen this month by federal agents, Reuters reported.
The move to install Tom Homan to replace top Border Patrol official Gregory Bovino is part of a broader reset by the president amid some advisers’ concerns that the killing of 37-year-old Alex Pretti could derail his immigration agenda.
It comes after Donald Trump said his administration was “reviewing everything” yesterday following the fatal shooting.
A US judge has also ordered acting ICE director Todd Lyons to appear in a Minnesota court on Friday, saying the agency's violations of court orders were "extraordinary", the BBC reported.
District Judge Patrick Shiltz has ordered Lyons to explain why his agency has failed to hold a bond hearing for an immigration detainee in the court-ordered timeframe.
In business news, luxury conglomerate LVMH has reported better-than-expected earnings, as the sector’s recovering business in China starts to take hold.
As CNBC reported, LVMH’s organic revenue grew by 1% in the three months ended December, compared with a flat performance in the same period a year ago.
Its fourth-quarter revenue of €22.7b ($45.1b) was €500 million higher than expected.
It comes as LVMH, which is the parent company of 75 luxury brands, saw a noticeable improvement in Asia, excluding Japan.
Louis Vuitton’s store on Auckland’s Queen Street.
The results, alongside those of peers such as Richemont and Burberry, have fuelled investor optimism that the gloom hanging over the luxury sector for the past two years, as Chinese consumers retreated, has started to lift.
In other news, China’s biggest sportswear brand, Anta Sports, has struck a deal to buy the Pinault family’s 29% stake in Puma for US$1.8b, Reuters reported. The family is the company’s largest shareholder.
Anta said it would use its expertise to help the struggling Puma increase its sales in China, while also helping Anta, which owns Fila and is a backer of Salomon, become a more global business.
Meanwhile, the deal will help the Pinault family investment vehicle, Artemis, which also controls Paris-listed luxury conglomerate Kering, reduce debt.
Puma’s shares gained by as much as 17% following the deal, as the purchase price of €35 per share represented a 62% premium to Puma’s last closing price.
The German brand has been under pressure as sportswear competition has intensified, and its recent sneaker launches have failed to generate the momentum executives had hoped for.
