The World Economic Forum (WEF) in Davos, 2026, spotlighted bold trade moves amid global tensions. Leaders addressed protectionism, with Europe advancing ties to India and China defending its economic role.
EU-India Pact on Horizon
European Commission President Ursula von der Leyen revealed the EU is close to sealing a historic free trade agreement (FTA) with India. Dubbed the “mother of all deals,” it targets a massive market of 2 billion people—nearly a quarter of global GDP. Final tweaks remain, with von der Leyen’s India visit planned soon after Davos. This pact boosts goods, services, and investments, countering supply chain risks.
For India, the deal opens EU markets for agriculture, autos, and tech services. The EU gains from India’s growth story, including manufacturing and digital exports. Negotiations, ongoing since 2022, accelerated post-Ukraine war diversification needs.
China’s Market Pledge
China’s Vice Premier He Lifeng firmly denied pursuing trade surpluses deliberately. Speaking at Davos, he vowed to ramp up imports, positioning China as both the “world’s factory” and “world’s market.” He warned against reverting to “law of the jungle” amid U.S. tariff threats under President Trump.
He Lifeng highlighted China’s $992 billion surplus in 2025 but stressed balanced growth. Beijing aims for more foreign goods, services, and investment, easing global concerns over imbalances.
Global Trade Implications
These announcements signal a multipolar trade era. The EU-India FTA could reshape Asia-Europe flows, rivaling deals like RCEP. China’s openness counters decoupling fears, vital for exporters from India to the U.S.
Davos 2026 underscores dialogue over division. As tariffs loom, open markets promise stability. Watch for deal signings in coming months.
