Davos: The European Union is nearing the final stages of a free trade agreement with India, European Commission President Ursula von der Leyen announced Tuesday at the World Economic Forum, signalling a major shift in global trade dynamics.

While some technical hurdles remain, von der Leyen expressed high confidence in the deal’s trajectory.

"There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals. One that would create a market of 2 billion people, accounting for almost a quarter of global GDP," she said during a keynote address focused on diversifying Europe's international partnerships.

The Commission President linked the deal's progress to a high-profile diplomatic push, confirming she will travel to India next weekend following the Davos summit. She characterised the upcoming trip as a vital step to "strengthen economic ties and deepen cooperation" between the two powers.

Broadening the scope of the agreement, von der Leyen reaffirmed the EU’s commitment to global engagement. "Europe will always choose the world, and the world is ready to choose Europe," she stated, adding that the bloc's strategy centres on fostering a stable, well-regulated environment for sustainable investment.

Beyond trade, von der Leyen identified energy and defence as critical pillars for the continent's future. She advocated for an "urgency mindset" to build a European energy union focused on reliable, low-cost, homegrown power. On the defence front, she noted that the EU has made more progress in the past year than in previous decades, highlighting record investment levels and the rise of three European defence technology "unicorns."

The diplomatic momentum will culminate in New Delhi, where von der Leyen and European Council President Antonio Luis Santos da Costa will serve as Chief Guests for India’s 77th Republic Day celebrations at Kartavyapath on Jan. 26.

The three-day state visit, beginning Jan. 25 at the invitation of Prime Minister Narendra Modi, will include the 16th India-EU Summit on Jan. 27. The European leaders are scheduled for talks with President Droupadi Murmu and Prime Minister Modi, with an India-EU Business Forum planned to run concurrently.

The Ministry of External Affairs (MEA) emphasised that the two entities have been strategic partners since 2004. According to the MEA, the presence of the EU leadership at the Republic Day parade, a move that follows a major visit by the EU College of Commissioners to India last February, marks a deepening of a partnership that has significantly expanded in scope and priority.

With inputs from ANI