India-EU Trade Deal a Chance for ‘Great Powers’ to Join Forces, Says German Chancellor Friedrich Merz

German Chancellor Friedrich Merz on Thursday said the proposed free trade agreement between India and the European Union could serve as a unifying force for major economies at a time when global trade faces growing uncertainty.

Addressing a session at the World Economic Forum Annual Meeting in Davos, Merz linked the India-EU negotiations to a broader effort to strengthen cooperation among countries that support predictable, rules-based economic engagement rather than unilateral trade barriers.

'Era Of Great Powers'

Referring directly to the India-EU talks, Merz said the current global environment offers scope for deeper alignment among large economies.

"In a few days, the President of the European Commission will travel to India to establish the principles of a free trade agreement between the subcontinent and the European Union," he said.

“I was in India a week ago, and I have no doubt whatsoever that the era of great powers presents an opportunity for all of us and for all countries that favour regulations above arbitrary rule and see benefit in free trade than in protectionism and isolationism," he added.

The German Chancellor noted that discussions between India and the European Union are moving toward defining the core principles of the agreement, signalling political intent on both sides to advance negotiations.

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Why The Deal Matters For Both Sides?

India and the EU are negotiating a wide-ranging pact covering goods, services, investment, and regulatory cooperation. If concluded, the agreement would link two of the world’s largest economic blocs, expanding market access and reinforcing supply-chain resilience amid shifting global trade patterns.

Germany, the EU’s largest economy and India’s biggest trading partner within the bloc, has consistently supported deeper economic engagement with New Delhi as Europe looks to diversify trade relationships beyond traditional partners.

Merz’s comments at Davos add to the growing political momentum behind the trade talks, as India and the EU seek to resolve remaining differences on tariffs, standards, and market access. European leaders have increasingly described the agreement as a cornerstone of the broader India-EU strategic partnership.

Earlier, speaking during the World Economic Forum in Davos, European Commission President Ursula von der Leyen said, “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.” Von der Leyen, alongside European Council President António Costa, will be the chief guests at India’s 77th Republic Day parade on January 26 and will co-chair the India-EU Summit on January 27. Commerce and Industry Minister Piyush Goyal also recently referred to the pact as “the mother of all deals.”

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