Relevance: GS Paper II (Global Groupings) & GS Paper III (Indian Economy, Internal Security/Cyber Risks) | Source: WEF Reports / The Hindu

Context & Theme

The 56th Annual Meeting of the World Economic Forum (WEF) was held in Davos, Switzerland, under the theme “A Spirit of Dialogue”.

• Objective: To provide a neutral platform for global leaders to restore cooperation in a fractured world.
• Backdrop: The summit occurred amidst rising “Geoeconomic Confrontation,” where nations are increasingly using economic tools (sanctions, trade bans) as weapons of war.

Key Reports: What UPSC Aspirants Must Know

1. Global Risks Report 2026

This flagship report identifies the most severe threats to the world:

• Top Short-Term Risk (2 Years): Geoeconomic Confrontation. It has overtaken armed conflict as the biggest global danger, signaling a shift from “military battles” to “trade wars.”
• Top Long-Term Risk (10 Years): Climate Change (Extreme weather events and biodiversity loss).
• India-Specific Finding: Cybersecurity is identified as the #1 risk for India in 2026.
  • Reason: India’s rapid “digital leap” (UPI, Aadhaar, ONDC) has outpaced its cyber-defense capabilities, making critical infrastructure vulnerable.

2. Chief Economists Outlook

• Global Sentiment: “Cautiously optimistic” but fragile.
• Bright Spot: South Asia is projected as the strongest regional growth performer, with India acting as the “growth anchor” driven by robust domestic demand and AI adoption.

India at Davos: From “Potential” to “Power”

India’s participation showcased “Paradiplomacy”, where individual states directly negotiate with global investors.

• New C4IR Centre: WEF announced a new Centre for the Fourth Industrial Revolution (C4IR) in Andhra Pradesh.
  • Note: This is the third such center in India, joining Mumbai (Maharashtra) and Hyderabad (Telangana), focusing on smart governance and energy transition.
• State-Led Diplomacy (Competitive Federalism):
  • Maharashtra: Signed MoUs worth ₹14.5 lakh crore.
  • Karnataka: Secured a deal with Nokia for a Global Capability Centre (GCC).
  • Andhra Pradesh: Pitched to global asset managers like Blackstone.

Geopolitical Developments

• Middle Power Assertiveness: Canadian PM Mark Carney urged “middle powers” to band together to resist hegemony, signaling a pushback against US unilateralism (Trump’s policies).
• Ukraine’s Stance: President Zelenskyy criticized Europe for appearing “lost” in the face of these geopolitical shifts.

UPSC Value Box

Why this matters for Governance & Economy:

• The Cyber-Inequality Nexus: In a digital-first economy, cyber insecurity is a social justice issue. A cyberattack on the PDS or DBT system disproportionately hurts the poor, widening inequality.
• Federalism in Action: The active role of states at Davos proves that India’s economic diplomacy is decentralizing—states are becoming independent engines of growth.

Way Forward:

• Reform: India needs a dedicated National Cybersecurity Strategy and a specialized Cyber Defence Agency to protect critical digital public infrastructure (DPI).

Summary

WEF 2026 highlighted a world divided by “Geoeconomic Confrontation,” where economic warfare is the new norm. India emerged as a stable “growth anchor,” leveraging its states to attract global capital. However, the designation of Cybersecurity as India’s top risk serves as a critical warning to fortify the digital backbone of our $5 Trillion ambition.

One Line Wrap: In a world of economic weaponization, India stands as a stabilizer but must urgently secure its digital frontiers.

Q. “The World Economic Forum’s identification of ‘Geoeconomic Confrontation’ as a top risk signals a shift from military to economic warfare.” Discuss this trend and analyze the specific cybersecurity challenges it poses for a digitizing India. (10 Marks, 150 Words)