India’s G20 presidency in 2023: Modi’s time to shine?
India’s G20 presidency in 2023: Modi’s time to shine?
WRITTEN BY MANALI KUMAR
26 January 2023
The presidency of the G20 — a forum of the world’s largest developed and developing economies — passed to India at the Bali Summit held in November last year. Founded in 1999 to help coordinate economic policies in the wake of several debt crises in emerging economies, today, G20 members account for about 85 per cent of global GDP, 75 per cent of international trade, and two-thirds of the world’s population. Although criticised for being exclusionary, the forum has the makings of an important force in global economic and financial governance, especially in times of crisis.
However, the 2022 G20 Summit was hamstrung by the war in Ukraine and overshadowed by initial media reports of Russian missiles landing on NATO territory in Poland as the leaders were gathered in Bali. Although Russia was further isolated during the Summit, the ongoing war distracted from key issues Indonesia — the outgoing president — had hoped to emphasise: food and energy security as well as the climate crisis. The Summit also did little to alleviate the post-COVID economic recession and inflationary crisis afflicting the world.
India’s first presidency of the forum begins at a time of mounting political and economic crises. Already planning to hold about 200 meetings covering 32 different themes in cities across the country, it will no doubt put together a lavish summit in New Delhi in September this year. What issues is India likely to prioritise and how much leadership in tackling difficult but much-needed discussions can we expect?
“One Earth, One Family, One Future”
Prime Minister Narendra Modi unveiled the logo of India’s G20 presidency — the earth on top of a lotus flower — with a characteristic speech vaxing eloquently about Hindu culture. Explaining the symbolism of the lotus, he emphasised the importance of “bringing the whole world together” in these times of “deep crisis” to work together “for a better future”. He also said India will work to ensure that instead of a “first world or third world” there will be “only one world”, and that it would develop its priorities for the presidency in collaboration with Global South countries. In his remarks at the closing session of the Bali Summit, Modi pushed the G20 to “convey a strong message in favour of peace and harmony”. He also emphasised the importance of universal and inclusive development, and presented his ‘Lifestyle for Environment’ (LiFE) campaign as a way to “make sustainable lifestyles a mass movement”.
With the next round of parliamentary elections scheduled for the summer of 2024, Modi is already in campaign mode, and the G20 presidency has all but been declared a success.
While India has yet to decide on the priorities for its presidency, several potential topics have been floated, including disaster risk reduction and resilience, fighting economic crime, green hydrogen, energy security, and food security. Among the potential issues India may seek to emphasise, climate financing is particularly urgent and one issue where it has a track record of representing Global South interests. A landmark agreement on creating a loss and damage fund for developing countries devastated by climate change was reached at COP27 last year, but there is no agreement yet on how the funds are to be raised or disbursed. As a Global South leader, India could make an invaluable contribution by making this issue a priority in its agenda and pushing advanced economies to commit to a plan for raising the financing required to deliver on this promise.
It has also been reported that India will prioritise decisions on regulating cryptocurrency — a subject that was also addressed in the Bali declaration — during its presidency. While G20 members appear to generally agree on the need for regulation, specific preferences seem to vary. The US seems to prefer regulating cryptocurrency within existing classical financial regulatory frameworks, while India seems to support strict rules or a ban altogether. This position is supported by the Reserve Bank of India citing threats to macroeconomic stability, risks of dollarisation, and concerns related to tax evasion and money laundering.
The emphasis on ‘inclusivity’ — both in terms of development and Global South priorities — sets the right tone and is consistent with India’s historical record of global leadership. As a major developing economy, India has traditionally supported inclusivity, avoiding protectionism and ensuring the continued growth and sustainable development of other emerging economies. In positioning India as the voice of the developing world, the Modi administration is drawing on a long- and well-established role of the country as a Global South leader.
In some other areas, however, such as women’s empowerment, India may lack the credibility to provide leadership. Although the Modi government has repeatedly emphasised the importance of empowering women for ensuring India’s development, little has been done for improving women’s status in Indian society. India is among the most unsafe countries for women in the world, and the recent release of convicts sentenced to life imprisonment for gang rape and murder in two high-profile cases points to the dismal state of justice for crimes against women. One can only wonder what sort of empowerment is possible in a society that cannot guarantee the basic security of women.
A dysfunctional family
The G20 was a divided forum last year. The most prominent division concerned Russia’s war against Ukraine. Although the members were united in condemning “the use or threat of use of nuclear weapons” and acknowledging the war’s negative impact on the global economy, only “most members strongly condemned the war in Ukraine”. If Russia’s war in Ukraine continues this year — and there are no signs of peace yet — global food and energy security are likely to get worse, as will supply chain disruptions and global inflation.
New Delhi has already faced criticism for failing to condemn Russia’s aggression and maintaining a position of neutrality. India’s continued purchases of Russian oil have also come under attack, with US Treasury Secretary Janet Yellen announcing mid-November that India cannot use “Western” shipping, insurance, and financial services in these deals. While the G20 may not be the forum for addressing security issues, India’s ties with Russia mean it could act as a mediator. Helping to achieve a peace agreement outside the G20 would not only improve New Delhi’s standing but it will also make it easier to move forward on economic and financial governance at the forum.
Beyond this issue too, however, the G20 has suffered from a lack of cohesion among the developed economies, as well as the diverging interests of developing and developed economies. Disagreements on policy have often affected the speed and nature of economic recovery during previous crises. With rising inflation and the looming threat of a global recession due to the ravages of the COVID-19 pandemic, the China-US rivalry, and the war in Ukraine, much-needed coordination may continue to be difficult to achieve. In this context, Prime Minister Modi’s assertion that India will work with Global South countries to prepare its agenda is especially important. Given the diversity of interests among emerging economies and the different dynamics of their economies, strong leadership is necessary for seeking points of convergence to articulate a common agenda and facilitate effective policy coordination.
Modi’s swansong?
During his eight years in office, Prime Minister Modi has pushed a lofty narrative of constructing a new, more just world order and India’s unique position as an ancient civilisation for doing just that. Unsurprisingly, the G20 presidency is being presented to domestic audiences as yet another important milestone in India’s rise to global leadership under its ‘visionary’ prime minister. With the next round of parliamentary elections scheduled for the summer of 2024, Modi is already in campaign mode, and the G20 presidency has all but been declared a success. However, beyond crafting a masterful narrative about unity, it remains unclear whether Modi will be able to galvanise his counterparts into committing to meaningful policies as part of the forum’s work in 2023. The issues facing the G20 this year are thorny and divisive. New Delhi will have to be nimble in adjusting to power equations and an international order in flux, and prove it has the diplomatic dexterity to provide leadership.
India’s staggering size — it is expected to become the world’s most populous country in 2023 — in combination with economic potential and current geopolitical importance means that it will have a seat at the international high table. But India’s international standing as a country should not be confused with Modi’s standing as an international leader. Using the G20 summit to style himself as a global statesman may help his re-election campaign in 2024. But it takes more than slick campaigns to succeed at the global level — brokering agreements between multiple states each pursuing their own national interests requires prudence and deft diplomacy. Although immensely successful in domestic politics and hugely popular among the Indian diaspora abroad, Modi has yet to prove his mettle as an international statesman. India has promoted multipolarity and claimed a spot for itself in a more equal world order for a long time. The Modi administration has fully embraced that narrative and sought to position India as vishwaguru (world guru). Whether he and his administration can seize this moment remains to be seen.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Dr Manali Kumar is a Postdoctoral Research Fellow and Lecturer at the University of St Gallen, Switzerland, and the Editor-in-Chief of 9DASHLINE. She studies India’s politics as a rising power and the value of prudence in decision-making under uncertainty. Image credit: Flickr/MEAphotogallery.