India shares set for subdued open amid US trade deal uncertainty, Fed caution

India’s equity benchmarks are set for a muted start on Tuesday, after logging their steepest drop in more than two months in the previous session, as uncertainty over a U.S. trade deal and caution ahead of the Federal Reserve’s rate decision weigh.

The Gift Nifty futures were trading at 25,964.5 points as of 8:03 a.m. IST, indicating that the benchmark Nifty 50 will open near Monday’s close of 25,960.55.

U.S. Treasury Secretary Scott Bessent said on Tuesday that Washington is still working toward a trade deal with India, even as reports said the U.S. administration has signalled plans to impose tariffs on rice, imported from India.

U.S. President Donald Trump unveiled a $12 billion aid package for American farmers on Monday, while threatening to impose tariffs on fertilisers from Canada.

Elsewhere, the MSCI’s broadest index for Asia Pacific stocks outside Japan fell 0.3% as caution prevailed ahead of the Fed’s policy decision.

The Fed is expected to cut rates on Wednesday, but Wall Street banks have pencilled in fewer reductions for 2026 amid lingering inflation concerns and expectations of a more resilient U.S. economy.

Higher U.S. interest rates typically support the dollar and lift Treasury yields, making emerging-market equities less attractive to foreign investors.

Foreign investors sold Indian shares worth 6.56 billion rupees ($72.8 million) on Monday, per provisional data. They have sold Indian equities worth $1.3 billion so far in December.