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India's G20 Presidency: Opportunities and Challenges

On November 12, 2022, Indonesian president Joko Widodo handed the gavel to PM Modi in Bali, and on December 1, India formally assumed charge of the G20. The G20's member nations represent 60 percent of the world’s population but, more importantly, account for 85 percent of global GDP and 75 percent of international trade. Since its inception in 1999, the G20 has emerged as the world’s most powerful international forum for major economic issues and, more recently, for geopolitical concerns too[1]. As president of the most powerful grouping of nations, India can pilot consensus on key global concerns and emerge as a world leader [2]. This is a remarkable opportunity for the leadership of India to shape the global response to the existing challenges. It is also the moment for India to take initiative and transition from being a ‘rule-taker’ to being a ‘rule-maker’[3]. Modi seems determined that India proves itself up to this challenge and wants to leave a lasting legacy during its presidency. At the concluding session of the Bali summit, he told the gathering of leaders, “The onus of creating a new order for the post-Covid period now lies on our shoulders. I want to assure you all that India’s G20 presidency will be inclusive, ambitious, decisive, and action-oriented. Together, we will make G20 a catalyst for global change.” If the Indonesian presidency was about ‘Recover Together, Recover Stronger’, India’s theme is “Vasudhaiva Kutumbakam” which means “One Earth, OneFamily, One Future”. As an official says, this theme reflects how nations need to unite and jointly handle the multiple stresses the world finds itself up against [4].

G20 Meetings in India

The Indian government is pulling out all the stops to make its presidency among the most successful ever. Starting on November 12, 2022, and till it passes the gavel to Brazil in December 2023, India will organize over 200 G20 meetings across 56 locations in the country—from Srinagar in the north to Thiruvananthapuram in the south and from the Rann of Kutch in the west to Kohima in the east. All 28 states and eight Union territories have been roped in to organize these meetings, which includes sprucing up venues and ensuring adequate hotel rooms and transport. The G20 meetings are organized along two main tracks—the finance track consisting of eight workstreams that will have 40 meetings, and the other headed by its Sherpa, consisting of 13 working groups with 60 meetings. There will be 15 high-level ministerial meetings, including two at the foreign and finance ministers’ levels. In addition, there are 12 engagement groups led by civil society organizations in the fields of business, science, gender issues, and in what is India’s addition—start-ups. They will have 50-odd meetings. In addition, 25 seminars and workshops have been Planned [5]. India intends to leverage these events to reaffirm its global heft in the domestic arena. It is also pushing for the largest-ever participation, hoping to have 43 heads of state, governments, and international organizations attending, including leaders from nine countries who will be special invitees for the summit. Among them are Bangladesh, the UAE, and Nigeria [6].

Opportunities

PM Modi has already been acknowledged as a peacemaker by the very fact that the Bali Summit ended on a positive note of acceptance by all nations on his famous statement to Mr. Putin that the present era was not that of war. India has also been recognized for its vaccine diplomacy during the post-pandemic recovery period. The country is thus in a very strong diplomatic position to use its one-year presidency and leave a mark on the world map [7]. While all eyes are understandably on the important global issues, discussed earlier, and India’s stance as president of G20, there is a strong domestic component as well. As mentioned earlier, several cities will get an opportunity to highlight their economic potential as well as heritage and culture [8]. One of the interesting aspects concerning India’s presidency of the G20 is the emphasis on ‘peoples’ participation’ and also the opportunity that cities outside the national capital will get to showcase themselves through events being held there [9]. Amitabh Kant, who is India’s Sherpa for the G20 and oversees all meetings on behalf of the prime minister, A former CEO of the NITI Aayog, Kant is also known for his ability to showcase India as a major tourist destination, with campaigns such as Incredible India and God’s Own Country for Kerala to his credit. He now wants to present India’s presidency as "an Incredible G20", as an official smilingly put it. Kant and his team have put together what he calls "a uniquely Indian experience that is spiritually elevating, culturally enriching, mentally rejuvenating, and physically invigorating" for the visiting delegates. They will be attending the major festivals of India, be it the kite festival in Ahmedabad, the sand art festival in Konark, the crafts mela in Surajkund, the Hornbill music festival in Kohima, or the dance festival in Khajuraho, all of which have been dovetailed with G20 events to project India’s soft power. There will also be beach cleaning drives as part of India’s Lifestyle for Environment mission to solve the global climate crisis. Projected as the "mother of democracy," India’s efforts in women-led development will be highlighted, while digital hackathons will demonstrate the major strides it has made in digital inclusion and transformation. The pitch extends to the delegates’ kits, which will project the arts and crafts of various states, whether it is Bihar’s Madhubani art on coffee mugs, Kashmir’s Kani work on bottles, or Kanjivaram and Gond designs on the bags for the delegates[10]. All this is expected to transform the G20’s usually staid meetings into a global spectacle that is enlightening, entertaining, and exhilarating [11]. The G20 presidency also allows India to initiate a transformation of the global regulatory structure by establishing the International Institute for Regulatory Development (IIRD). India can be the torchbearer for a new regulatory framework [12]. India can play an important role in highlighting the role of the Global South in the current geopolitical and economic landscape. The Indian PM Modi while referring to the Global South, said that during its Presidency, India will amplify the voices of the Global South which often get relegated to the margins [13].

Challenges

India's presidency has come at a time when the world is facing many challenges, ranging from Chinese aggression towards Taiwan, the rising food and energy crisis due to the Russia-Ukraine conflict, the ever-increasing belligerence of North Korea, the global economic slowdown, the emerging threats to trade in the Indo-Pacific region, and the concerns for the environment. With geopolitics high on the G20 agenda this year, it seems like a mammoth task for India to steer it out of rocky waters [14]. With the prime focus of the G20 countries being on securing long-term economic growth, the efforts will have to continue towards the guarantee of food, fertilizer, and energy security for all, especially the most disadvantaged households. In particular, the full implementation and continuation of the Black Sea Grain Initiative for the export of Ukrainian goods would be a major challenge for India. On the issue of climate change, the G20 reiterated its commitment to achieving global zero greenhouse gas emissions or carbon neutrality by the mid of this century[15]. Some gaps could be seen in the health security cooperation between the national ministries of finance and health for the Pandemic Fund to prevent, prepare for, and respond to future pandemics. These three issues would not, by any standard, be easy tasks for the Indian presidency. The additional tasks of adding the value of digital technology in several sectors, capacity development, and inclusive industrialization, especially in developing countries, would have to be addressed in parallel [16]. India acknowledged the impending consequences of economic decline, growing global poverty, and the delay in achieving the “Sustainable Development Goals” [17]. As a result, The key to the success of India’s presidency lies in its ability to navigate the members through a handful of choppy issues and arrive at a constructive consensus that could yield significant results [18]. In this part some of these challenges are discussed:

Ukraine War

Foremost among India’s challenges is the ongoing Ukraine war that has caused worldwide economic disruption, including a food and fuel crisis, in addition to rising inflationary trends. India walks a tightrope on the issue as Russia is a close friend and a country that has supplied both fuel and fertilizers to India at a reasonable price throughout the crisis [19]. India’s neutral stance about the Russia-Ukraine war provides hope that it might be able to bring both sides to participate in the G20 proceedings and make some headway beyond the current deadlock. India is faced with the task of identifying creative solutions to bridge these geopolitical differences and pave the way for conversations anchored in cooperation and collective prosperity. Indeed, India’s presidency might be expected to steer the articulation of an unambiguous G20 policy on the Russia-Ukraine war Bala Venkatesh Varma, a former Indian ambassador to Russia, says, “Indian diplomacy has demonstrated a high level of pragmatism. At Bali, India kept its doors open to everyone who matters on the subject. Then we kept the side channels open with Russia and key players on the western side, something even Indonesia, which was in the chair, appreciated. If the G20 at Bali had collapsed without a statement, it would have been double the work during our presidency.” Now, as chair of the G20, India is moving away from having to take a position to play a bigger role in trying to reach a peace settlement. Russia, though, seems intent on bringing Ukraine to its knees, conducting debilitating missile strikes on its infrastructure. So, finding ways to de-escalate the situation will be a tough task. However, if India can bring a modicum of settlement during its G20 tenure, it will be a major achievement. Varma’s advice: “We need to have the stamina and pace of a football referee to keep running from one end of the ground to the other without tiring. Nobody knows how the war will play out, but India needs to be in the game”

Defusing the Debt Bomb

The other major issue that India will have to preside over is defusing the global debt bomb. According to the World Bank’s 2022 annual report, more than 70 low-income countries besides a dozen other middle-income ones face a serious sovereign debt crisis. India does not have far to look at—its neighbors Sri Lanka and Pakistan exemplify how this can lead to financial collapse and political instability. With global recession looming, the Bank fears the situation will get even worse. India is pushing for the G20 to develop a financial toolkit to deal with the collective impact of transnational issues such as climate change, public health, and migration [20].

Restructure and overhaul the norms for lending and borrowing from international financing institutions: India will try to restructure and overhaul the norms for lending and borrowing from international financing institutions such as the World Bank, the International Monetary Fund, and other multilateral development banks (MDBs) to enable countries to access adequate funds to overcome financial stress [21].

Private Investment: The other is to get private investment to fund projects for the global public good of developing countries, including their energy transition from fossil fuels to renewable sources. Private investors will not bite unless they see good returns and feel secure [22].

Two-Pillar International tax agreements: Implementing what is called the Two-Pillar international tax agreements under the Global Anti-Base Erosion Model Rules prescribed by the Organization for Economic Cooperation and Development (OECD) in October 2021 is another significant issue on which India hopes to make progress. Pillar One is meant to ensure a fairer distribution of profits and taxing rights for many countries, including India, that have giant multinational enterprises (MNEs) like Amazon and Walmart regardless of whether they have a physical presence in the jurisdiction in which they do business. Pillar Two looks at tax havens like Ireland, Singapore, the Cayman Islands, and a dozen others that offer much lower tax rates than most countries [23].

Trade

As for trade, the pandemic exposed the vulnerability of current global value chains, particularly those dependent on China. The country is in the middle of another crisis, as blank paper protests greet the drastic shutdowns of its major cities, including Shanghai. Since major manufacturers and investors cannot delink from China that easily, what is being contemplated is a China Plus One value chain, in which alternative countries can be identified to build global resilience. India has a major stake in being one of the alternative countries and will use the G20 opportunity to push its case [24].

MSMEs

The country is also pushing for global norms that will enable the employment-intensive micro, small and medium enterprises (MSME) sector more access to funds. And to set up an Open Network for Digital Commerce as India’s industries ministry has done to prevent digital commerce monopolies from stifling MSME growth. It will have to tread carefully, though, on issues such as food and energy security. Russia became its largest supplier of oil recently, besides fertilizers. The US and Europe are pushing for a price cap on Russian oil sales in the hope that it will bring down energy prices, especially for developing economies, and also limit the amount of revenue Russia will have at its disposal to wage its war on Ukraine. It’s an issue that India will have to navigate with finesse [25].

Food Security

Regarding food security, as wheat shipments get disrupted owing to major wheat producers Russia and Ukraine being locked in war, India is pushing for a revival of millet production across the world. Unlike wheat, which requires plenty of water, millets grow in water-scarce regions and were the staple in the Global South till they were supplanted by commercialized wheat production. However, almost 130 countries continue to grow millets, with India being the largest producer, accounting for 20 percent of the total worldwide production of 89 million tonnes in 2019. In comparison, global wheat production stood at 800 million tonnes this year. India spearheaded a UN resolution last year to declare 2023 as the International Year of Millets, which was passed with the backing of 72 countries. At G20, it will push hard for countries to switch to millet production, helping the climate change cause too in the bargain, highlighting how it has a much lower carbon footprint and water usage than wheat [26].

Data as development

At the G20 Leaders’ Summit in Bali, Prime Minister Narendra Modi pledged that the principle of “data for development” will be integral to India’s G20 presidency. New Delhi’s commitment to this principle and its vision of strengthening it through international cooperation are already apparent Therefore, India hopes to play a leading role in bridging the digital divide. Almost four billion people, or half the world’s population, lack a digital identity. Two million people remain unbanked. And more than 130 of the world’s 195 countries still do not have a digital payments system. India can lead by example on how to bring about an inclusive digital revolution. Says Kant: “We have built the world’s best digital public infrastructure model that could be promoted at a global level, especially for developing countries. And we will advocate these solutions during our presidency [27].

Conclusion

India, at the G20 summit, has very clearly articulated its vision by stating that, “Without peace and security, our future generations will not be able to benefit from economic growth and technological innovation” [28]. As an established global leader, PM Modi's promise of an action-oriented and ambitious presidency will be closely watched by the world [29]. The degree of success India will find in pushing various agendas remains to be seen. Decisions taken at G20 meetings are widely acceptable, given the all-encompassing nature of its membership.” India will leave no stone unturned to ensure its year-long presidency enhances its stature as an emerging world power and helps it become the voice of the Global South [30]. Therefore, the stage is set now for India to take the lead and work towards global peace, rule-based governance, and growth for all on the world canvas [31].