At the World Economic Forum in Davos, conversations among global policymakers and corporate leaders are undergoing a subtle but important shift. India is no longer being referenced merely as a high-growth emerging market, but as a consequential player in global trade, geopolitics, and corporate strategy. This was underscored by comments from KPMG India CEO Yezdi Nagporewalla, who told Moneycontrol that discussions around geopolitics are now inseparable from India’s positioning in the global order.

Speaking on the sidelines of the World Economic Forum on January 20, Nagporewalla highlighted that uncertainty driven by geopolitical tensions has elevated India’s relevance. According to him, India is increasingly being seen not just as an alternative manufacturing base, but as a potentially stabilising force in a fragmented global economy. That shift in perception is significant, given how supply chains and trade alliances are being re-evaluated worldwide.

This backdrop gives added weight to remarks made earlier in the day by European Commission President Ursula von der Leyen, who said that the European Union is close to finalising a free trade agreement with India. Addressing delegates at Davos, she described the proposed pact as being on the “cusp of a historic trade deal,” a signal that negotiations may be approaching their final stages. She went further, calling it the “mother of all deals,” noting that such an agreement could create a combined market of nearly two billion people, accounting for close to a quarter of global GDP.

While the rhetoric is ambitious, the strategic logic is clear. For the EU, diversifying trade relationships has become a priority amid rising geopolitical risks and recalibration away from overdependence on a single region. For India, such an agreement would offer clearer access to one of the world’s largest consumer and industrial markets, while also embedding India more deeply into global value chains.

Nagporewalla emphasised that trade deals of this nature are not just about tariffs or market access. From a business perspective, they reduce uncertainty and improve trust. In his words, once the “field of play” is clearly defined, corporates and governments gain clarity on rules, compliance, and long-term investment decisions. This reduction in ambiguity, he argued, fundamentally changes how companies plan capital allocation and expansion strategies.

The broader implication is that India’s policy focus on self-reliance is not contradictory to deeper global integration. Rather, it reflects a calibrated response to geopolitical volatility. Nagporewalla noted that in an uncertain global environment, India has to gradually strengthen local manufacturing and production capabilities. This aligns with the government’s existing emphasis on domestic manufacturing, and he expects forthcoming budgets to continue supporting local capacity-building rather than reversing course.

At the same time, trade diplomacy and manufacturing are not the only themes dominating Davos boardrooms. Artificial intelligence remains a central topic of discussion among CEOs and policymakers. According to Nagporewalla, AI is no longer a peripheral or experimental subject for Indian corporates. Companies, he said, can no longer afford to sit on the sidelines and observe how AI evolves. The conversation has shifted decisively towards enterprise-wide investments, deployment strategies, and the question of return on investment.

This framing is important for India Inc. AI adoption is no longer being discussed as a technology upgrade, but as a strategic necessity that could determine competitiveness over the next decade. Both corporates and governments are being forced to assess where AI fits into productivity, service delivery, and global relevance.

For Indian markets, these developments collectively point to a more complex but potentially constructive environment. A credible EU–India free trade agreement would provide long-term visibility to exporters, manufacturers, and service providers, even if near-term market reactions remain muted until formal details emerge. At a sector level, manufacturing-led industries and globally integrated services stand to benefit most from reduced trade friction and clearer regulatory frameworks.

From a bullish perspective, India’s rising prominence in geopolitical and trade discussions could translate into sustained foreign investment interest, particularly if policy stability and clarity improve. Reduced uncertainty, as highlighted by Nagporewalla, is often a precursor to higher long-term capital flows. On the bearish side, timelines and execution risks remain. Trade agreements of this scale often face delays, political resistance, and sector-specific compromises that can dilute immediate economic gains.

The key risk lies in expectations running ahead of outcomes. Until a trade pact is formally concluded and implemented, markets will remain cautious. Similarly, while AI adoption promises efficiency gains, misallocation of capital or unclear ROI could pressure corporate balance sheets in the short term.

Nonetheless, the messaging from Davos is unambiguous. India is no longer on the fringes of global economic conversations. It is increasingly being discussed as part of the solution to geopolitical uncertainty, rather than merely being affected by it.