India and Chile Sign Terms of Reference for Comprehensive Economic Partnership Agreement Negotiations (Press Information Bureau, GoI)
India and Chile signed the Terms of Reference (ToR) for a Comprehensive Economic Partnership Agreement (CEPA) on 08 May 2025, building on their existing Preferential Trade Agreement (PTA) established in 2006 and expanded in 2017, with negotiations led by H.E. Mr. Juan Angulo, Ambassador of Chile in India, and Shri Vimal Anand, Joint Secretary, Department of Commerce, Government of India. The CEPA aims to enhance bilateral trade by broadening the scope to include digital services, MSMEs, critical minerals, and investment cooperation, with the first round of discussions scheduled for 26–30 May 2025 in New Delhi. This decision follows the reaffirmation of economic cooperation during Chilean President Gabriel Boric Font’s state visit to India in April 2025, where leaders emphasized deepening trade ties to unlock new growth opportunities and drive mutual economic integration.
Indo-Pak conflict: Rupee posts biggest single-day loss in over two years (The Indian Express)
The rupee plunged 89 paise to close at 85.72 against the US dollar on Thursday, marking its worst performance since February 6, 2023, due to heightened geopolitical tensions between India and Pakistan amid ‘Operation Sindoor,’ alongside a stronger US dollar and rising crude oil prices. The currency market witnessed sharp volatility following India’s precision strikes on terror hubs in Pakistan and Pakistan-occupied Kashmir, while Pakistan’s failed drone and missile attempts further escalated risk aversion; India VIX surged 10% to 21.01, reflecting investor anxiety. Despite the current pressure, analysts suggest that FII inflows of Rs 9,647 crore till May 7, 2025, coupled with potential RBI policy easing, strong Q4 earnings, and hopes of a US trade deal, may provide some support to the rupee in the coming weeks.
Hostilities between India-Pakistan heighten credit risks for both nations: S&P (Financial Express)
S&P Global Ratings stated that the ongoing hostilities between India and Pakistan elevate credit risks for both countries, potentially pressuring their sovereign credit ratings of ‘BBB-’ (positive outlook) for India and ‘CCC+’ (stable outlook) for Pakistan if tensions escalate further. Despite the immediate surge in geopolitical risk following India’s military strikes on terror sites in Pakistan and PoK under ‘Operation Sindoor,’ S&P expects tensions to remain elevated for the next two to three weeks but anticipates eventual de-escalation, minimizing long-term credit impact. However, a prolonged conflict could disrupt India’s growth trajectory (forecasted at 6.3% for FY26, revised from 6.5%) and derail Pakistan’s path to macroeconomic stability, amplifying risks for foreign investors amid global uncertainty.
