India’s G20 Presidency: Implications for India’s Foreign Policy

Session Report
Narayani Bhatnagar

Our second speaker on the last day of the three-day online certification training course on India’s G20 Presidency and Contours of Indian Foreign Policy organised by #IMPRI Centre for International Relation and Strategic Studies (CIRSS), IMPRI Impact and Policy Research Institute, New Delhi programme was Professor Sanjukta Bhattacharya.

She gave us a presentation on the subject, India’s G20 Presidency: Implications for India’s Foreign Policy. Her presentation offered the contrary side of India’s involvement in the G20. Her lecture was divided into the following sections: Introduction: G20 priorities at commencement; shifting emphasis; and significance and relevance of G20.

Introduction to G20

She commenced her discussion by providing an introduction to G2O. The G20 is a group of 19 nations plus the EU that represents the world’s most important established and growing economies. Bringing the world’s leading advanced and emerging economies together.  It was formed in reaction to the 1990s financial crisis and the rising and emerging economies that bore the brunt of the crisis. They were underrepresented in global economic debates and governance. 

It was established in 1999 as a meeting place for finance ministers and central bank governors to address global economic and financial challenges. Following the global financial crisis of 2007-08, it was elevated to the level of heads of state and government and recognised as the Premier platform for international economic cooperation.

This is significant because the international economic economy, finances, and trade, as well as economic issues such as tariffs, supply chains, food security, and energy security, are all part of international relations and foreign policy, but when it comes to economic issues, the G20 is deviating and discussing other issues.

The forum was established to examine economic concerns, particularly macroeconomic difficulties, but its focus has since grown to include trade, sustainable development, health, agriculture, energy, the environment and climate change, and anti-corruption. India has invited Asia Development Bank and ASEAN countries to this G20 meeting. 

The agenda includes policy coordination among its members in order to promote global economic stability, sustainable growth, and financial regulation that minimises risk and prevents future financial crises, as well as the creation of a new financial architecture. 

Understanding the significance of the objectives is equivalent to understanding the significance of the G20.  This organisation reflects the following numeric combinations, it accounts for more than 80% of global economies, about 75% of global commerce, around 65% of global people, and 79% of global carbon emissions. 

This demonstrates that this group has the political will to take serious action on global economic concerns. These statistics have stayed relatively steady, whereas those of the G7 (the world’s most advanced democracies) have declined. Because developing markets now account for a higher proportion of the global economy. 

G20 is significantly more indicative of the current world balance than G7 since it includes growing democracies like India and Brazil, as well as important authoritarian countries like China and Saudi Arabia. Russia has been suspended from the G7 indefinitely but is a member of the G20. As a result, G20 members are the world’s most powerful economies, shaping macroeconomic policy.

The G20 initially concentrated on macroeconomic concerns and was highly effective during the 2008 financial crisis. G20 countries decided to invest $4 trillion to stimulate the economies. They rejected trade restrictions and established far-reaching banking systems. In 2010, South Korea hosted the first Asian summit. They worked for development rather than just macroeconomic and monetary difficulties. The South Korean development path is integrated into the United Nations Sustainable Development Goals for 2030. 

Other priorities emerged throughout the future meetings. The 2017 meeting in Germany focused on concerns such as corruption, money laundering, and international tax havens. At the 2016 Hangzhou Summit in China, US President Barack Obama and Chinese President Xi Jinping formally confirmed their nation’s participation in the Paris Climate Agreement

Special policy measures have also been announced. At the 2009 G20 meeting, the G20 addressed how to deal with a covered Iranian nuclear plant. The 2017 conference debated a partial cease-fire in Syria. However, G20 decisions are unanimous, and the agenda’s execution is dependent on the member countries’ political will.

Climate change has been discussed in G20 summits. Countries agreed to reduce methane emissions and terminate public financing for the majority of new coal power plants at the 2021 Rome Summit, but nothing was expressed about limiting domestic coal consumption. In the 2022 conference, Indonesia pledged to close all power plants in return for 20 billion dollars in finance from high-income countries such as the United States, but the conclusion has yet to be determined owing to the Ukrainian conflict and lack of energy sources.

At the July 2021 conference of the environment ministers, China, India, and Saudi Arabia will phase out coal consumption and fossil fuel subsidies. 

The G20

The G20’s long-standing commitment to an international order founded on WTO principles of lowering tariffs and trade barriers has met in recent years with increased economic competitiveness between big countries, particularly the United States and China. Former President of the United States of America, Donald Trump was expected to begin a multi-front trade war, with some G20 nations imposing sanctions on China that the Biden Administration has mostly maintained.

The reality is that the gap between the interests of low-income nations and those of high-income countries is widening, and rivalry among the great powers is also rising. It is in the context of all of this, as well as current geopolitical realities, that India’s G20 presidency must be placed. What is important is that it is no longer a forum that discusses only macroeconomic issues, which naturally involve diplomacy and informed relations, but a wide range of issues that are purely in the realm of Foreign Affairs, for instance, the Iranian nuclear plant or the Syrian war, and the war in Ukraine, which has been dominating not only the G20.

The war in Ukraine has strained relations between Western Europe, the United States, and advanced economies such as Japan, which has backed the sanctions imposed by the West on Russia and, of course, China. So far, India has played a balancing act in the Ukraine crisis, abstaining from denouncing Russia’s aggressiveness while advocating for a diplomatic settlement.

It wants to keep both sides happy, and since it has increased tensions with China, it cannot afford to alienate Moscow on the one hand, while on the other hand, it is tapping into Western tensions with China to deepen its relations with the US and Europe. As a result, despite what it says, India remains on a tightrope between war and peace. 

India’s focus during its Presidency in 2023 – The issue of international audience vs. domestic audience

Professor Bhattacharya went on to explain the role that the current government of India will have in making the G20 a successful event for both worldwide and domestic audiences.

The General Elections of India have been set for 2024. It is in the current administration’s and the ruling party’s interest to play both to an international audience that must wish to impress by putting a stamp on its Global rise as well as to a domestic audience to whom it wishes to showcase the G20 presidency as an unforgettable occasion and a grand success in order to win another spectacular victory in the next elections.

The majority of the Indian populace is unaware that the G20 presidency is regular, so there are these five groups, and from these five groups, we know that the next one will be Brazil, and the year after that is also set. So they decide which areas will be represented by which country sets the agenda of the G20 presidency.

So on the one hand, India, which sets the agenda for this year’s G20, has prioritised non-controversial developmental issues and on the other hand, it has included so-called cultural initiatives like the “Special University Connect” event with 75 Indian educational institutions across the country now and these are not G20 institutions, but only Indian universities, as well as the highlighting of 100 ASI monuments with G20 logo colours. The G20 was showcased in Nagaland’s Hornbill Festival, and sand artist Sudarshan Patnaik created a sand art of the G20 emblem on Purvis. 

This has nothing to do with India’s priorities on the multilateral platform, but rather the so-called achievements in hosting the G20 Summit during the BJP’s self-proclaimed Amrit Kal to the domestic audience. The team of India’s G20 presidency is in line with its self-proclaimed Amrit Kal; it is based on India’s religious socio-cultural historical background, Vasudev Kutumbukum, which has been translated into one Earth, one family, one future.

According to India’s official G20 website, India acknowledges the worth of all life, including humans, plants, animals, and microbes, as well as their interconnectivity on Earth and with the universe–a modern interpretation of an ancient Credo that may be expanded to include inclusive development.

This may be seen as a vision statement since the priorities are more clearly stated: green development, climate finance and lifestyle (LiFE), for the environment, accelerated inclusive and resilient growth, and accelerated progress on sustainable development objectives. Multilateral institutions for the twenty-first century, including technological change and digital public infrastructure, as well as women-led development. 

In a nutshell, India wishes to push for inclusive development, green development, technological transformation, and reform of multiple multilateral institutions, all of which have very clear agendas. India has spoken for the smaller states that are truly represented in global forums even before its independence, and India may see the G20 presidency as an opportunity to be a voice for the Global South in the twenty-first-century context.  

“We must become the voice of the global South that is otherwise underrepresented in such forums.”

Mr S Jaishankar

“Our priorities will be shaped in consultation with not just our G20 Partners, but also our fellow travellers in the Global South.“We shall present India’s experiences, learnings, and models as possible templates for others, particularly the developing World.”

PM Narendra Modi

Professor Bhattacharya further elaborated that in reality, several steps have already been done that demonstrate India’s desire to be more inclusive of smaller underrepresented states and even tiny industries. A development working group has been formed to address development challenges in developing nations, small island developing states, and island states.

There will also be the launch of a 20-member engagement group, which is fairly innovative. This group will recognise the importance of startups in fostering innovation that reacts to a rapidly evolving global context. A new working group on disaster risk reduction will also be established this year to boost G20 collective cooperation on disaster management, and small states will require assistance in disaster management. 

If all goes well, India may leave its imprint on the G20 by advancing its vision of inclusive development and obtaining pledges from the world’s most advanced and rising nations. However, the presidency arrives at a moment when the war in Ukraine escalates the existential danger. 

Geopolitics and Realpolitik: India’s Desire to be a Voice for the ‘Global South’ vs. the Reality of global divisiveness: ‘G-Zero’?

The presidency reaches a time when existential threats are accumulating, exacerbated by the war in Ukraine. Since the beginning of the pandemic, it has caused food scarcity, skyrocketing energy prices, and inflationary pressures, prompting over 100 countries to seek IMF emergency assistance, disrupting supply chains, resulting in negative GDP growth, unemployment, and increased poverty. 

Furthermore, Professor Bhattacharya added that India must employ its diplomatic talents to negotiate member countries’ poisonous nationalisms. The group contains the world’s two most powerful strategic competitors, the United States and China, as well as some of the world’s most bitter rivals, the United States and Russia. China and the Republic of Korea China and Japan, for example. 

Particularly geopolitical analysts Ian Bremmer and Nadia Roubini have claimed that the G20 is no longer useful, implying that a G-Zero world is forming, in which nations go it alone or create Ad-Hoc coalitions to achieve their interests.  Although the host nation had put out an agenda centred on three pillars of post-pandemic macroeconomic policy: Global Health architecture, Digital revolution, and Sustainable energy transition, the reality that multilateralism itself was in crisis was clear during the 2022 Bali Summit. 

Deliberations were fully dominated by the Ukraine war, and finally, at The Summit, a joint statement was released condemning the Russian Federation’s actions against Ukraine and demanding an immediate withdrawal of Russian troops. This was modified with the caveat that other member countries had “other visions and different assertions, assessments of the situation, and sanctions.” 

A similar lack of consensus was seen in this year’s Finance Ministers conference in Bengaluru, which failed to agree on a common statement following the meeting, despite the fact that the G20 is the premier venue for world economic advancement.

This meeting of Finance Ministers and Central Bank Governors should have been the most important or at least one of the most important events for development talks, but the Russia-Ukraine conflict took precedence over economic issues, and both Russia and China refused to sign the joint statement that criticised Moscow’s invasion, leaving India to issue a Chair Summary and Outcome Document. 

She added that the Chair Summary and Outcome Document summarised the two days of meetings and recognised disputes, which is not the same as publishing a consensus paper that was universally supported. The same thing happened during the Foreign Ministers’ meeting in New Delhi on March 1st and 2nd, which was well publicised and attended by both the US Secretary of State and the Russian Foreign Minister.

However, Japan and South Korea’s foreign ministers were noticeable by their absence, despite the fact that both nations are highly important not just for the G20 but also for India, where both invest substantially, and their last-minute departure was notable. 

Assessment of the Foreign Ministers Meeting: Is India’s vision going off-track?

Despite both the US Secretary of State Antony Billington and Russian Foreign Secretary Sergey Lavrov emphasised their respective countries’ special connection with India, our media has questioned this. 

They use strong language to attack each other, with Lavrov accusing Western sanctions of “stealing natural resources from our countries” and Blington accusing Russia of being responsible for the worsening global food security situation and saying that putting Putin in charge was “weaponising the hunger of people all over the world.” 

Our External Affairs Minister of India, Mr Jaishankar, acknowledged the polarization but also claimed that the participants agreed on key issues confronting the global economy such as debt distress, food and energy security, but the outcome was the same as the Finance Minister’s meeting because there was no agreement on a joint statement and the Chair had to provide only a summary and Outcome Document.

Interestingly, Professor Bhattacharya added that another meeting should be highlighted, it was convened immediately following the FML on March 3rd. This was the Quad Ministerial Meeting, and as you all know, the Quad provides Japan, India, and Australia with a significant anti-China defence component. A joint statement was made on closer collaboration in numerous domains to preserve a free and open Indo-Pacific, and as predicted, Russia and China both quickly criticised it as hostile.

The discord among G20 members was especially visible in the Raisina dialogue that followed the court meeting on March 4th. Here, the Russian foreign minister came over as furious and strong, even against the Indian moderator, while the EU leader stated that UN changes may wait until the Ukraine conflict is finished and the world has addressed the issue of climate change. Thus, India’s aspirations for negotiations on international body reform, such as UN and G20 reform, have been disappointing. 

Professor Bhattacharya stressed the fact that this does not bode well for India’s foreign policy during the G20 presidency. 

Throughout the first two months of this year, there was much discussion in the Indian and foreign media about India’s ability to balance relations with all sides because it takes the middle path, giving it credibility with all sides. While it is true that India’s economic, military, and diplomatic stature makes it indispensable for any Indo-Pacific grouping to balance China’s rise, it is also true that India has strong historical ties with Russia, from whom it buys the most weapons and armaments.

It must also be remembered that India does not appear to have any particular leverage with either the US or Russia that would give it an essential role in closing the dividing segments created by the situation in Ukraine.

According to Mr Jaishankar’s remark during the Foreign Ministers’ meeting, India would prefer to focus on its core challenges, namely the green economy. Economic development that is financially stable, sustainable, and inclusive. It certainly does not want the acrimonious Ukraine conflict to derail its G20 agenda; however, certain questions are relevant apart from some broad references to energy, food, and debt issues, as well as talk of development and the Global South. India’s G20 presidency still needs to come out with a specific long-term agenda, such as South Korea’s development fact agenda of 2010, which was a detailed document that changed the G20.  

Most of India’s G20 records are either broad generalisations like one Earth, one family, and one future, or they focus on the strengths of the Indian economy and Indian initiatives, without exploring how these can be leveraged to draw up a development plan for the Global South, or women-led development, or digital transfer transformation. This may be important for immediate dissemination to an Indian audience, but if they do not have to move the G20 economic agenda forward, the G20 economic agenda will not last beyond India’s presidency on the international stage.

Furthermore, there is an emerging platform as a result of the failure of two large banks in the United States that catered to the tech industry, which is reminiscent of the housing bubble that burst 15 years ago, causing a financial crisis all over the world and, in fact, leading to the G20’s strengthening as a multilateral platform.

The rate of collapse is rapid, which doesn’t bode well for global financial stability. Even though the US is attempting to contain the problem, it has already spread to Swiss and European banks. This may have an influence on India’s G20 agenda for the Global South.

Will India’s presidency leave a permanent imprint on multilateralism or the G20?

Thus far, there is no evidence of any breakthrough or consensus that India can engineer; however, it can still change the narrative by taking a positive lead in focusing on developing-nation issues and steering discussions that stay on track rather than applauding the fact that Russia and America’s foreign ministers met and the Indian foreign minister spoke with the Chinese foreign minister on the sidelines. There was no actual effect from any of these meetings, and it is pointless to dwell on the fact that they took place on Indian land because they resulted in nothing. 

Professor Bhattacharya concluded her presentation by sharing that India can yet construct a workable framework of collaboration between the OECD-led global development architecture and South-South cooperation into an aspect of the 2023 G20 proposal that is acceptable to everybody. As opposed to petitions, India may provide a completely new development path for the next decade, fulfilling its objective to lead as it has stated, as she quoted, “inclusive ambitious action-oriented indecisive G20 presidency.” 

Read more session reports from Day 1 India’s G20 Presidency and Contours of Indian Foreign Policy

India’s Digital Public Diplomacy and Brand Building

Contours of India’s Foreign Policy in the Current Era

India’s Rise and Future- Southeast Asian Strategic Relations

Narayani is a research intern at IMPRI.

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    IMPRI, a startup research think tank, is a platform for pro-active, independent, non-partisan and policy-based research. It contributes to debates and deliberations for action-based solutions to a host of strategic issues. IMPRI is committed to democracy, mobilization and community building.

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  • Krishti khandelwal