G20: India’s Presidency kept key conversations going in a polarised world

India has also been able to drive the G20 work outside the national capital providing India’s powerful states with direct access to critical global issues.

India’s G20 presidency is headed to a glitzy yet unremarkable conclusion. The G20 Heads of State and Government Summit scheduled for September 9-10 in New Delhi will be the culmination of the yearlong government sponsored fanfare.

Even as we have not witnessed concrete outcomes, the G20’s “real importance” becomes apparent during times of global financial turmoil when governments and regulators need to take synchronised actions. Maintaining the habits of cooperation during quieter times and holding regular discussions on fast-evolving digital and financial tools is crucial. This is where the true value of G20 lies.

Expectations From India’s Presidency

As India began its G20 presidency, it was not clear if the year would be driven by positive, helpful areas of coordination like the regulation of digital payments, sustainable finance, and similar areas. After all, India would rightly want to tout its success in expanding financial inclusion and digital public infrastructure; and green development and climate finance – punctuated by India’s own “Lifestyle for Environment” (LiFE) programme.

Or if the agenda would be dominated by crises such as a new COVID-19 wave, or Russia’s invasion of Ukraine. The challenges we might have assumed a year ago did not materialise. We have not seen new, more-damaging COVID waves. Global oil prices have stabilised over the last year. Despite some sabre-rattling between China and its neighbours, no wider conflicts broke out.

While there remains some level of tension in the G20 on how to characterise, and act on, Russia’s invasion of Ukraine, this tension has not derailed the conversations to a meaningful degree.

India’s G20 Report Card 

All things considered, India has navigated a tumultuous landscape to charter a successful G20 presidency.

Much to India’s credit, division over issues like Russia’s invasion of Ukraine, or gaps in explicit financial commitments from rich countries over climate change have been voiced, but not dominated the proceedings. India has used its heft to ensure more developing nations will have a seat at the table, including getting promises from the United States and other nations to allow the African Union to become a member.

India has also been able to drive the G20 work outside the national capital – hosting over 200 meetings across 60 cities – providing India’s powerful states with direct access to critical global issues.

Global markets did have a couple of unforeseen challenges. Early in India’s presidency, cryptocurrency markets roiled as the cryptocurrency exchange FTX entered bankruptcy protection.

There were some fears mid-way through India’s presidency that global financial institutions were on the verge of a crisis. The United States saw multiple bank failures and the major European bank Credit Suisse required an emergency acquisition by UBS to shore up its position.

But cryptocurrency markets and key banks remained relatively stable, otherwise. Neither situation triggered the need for multilateral interventions or the creation of new models for the oversight of multinational banks.

Global Market Outcomes 

The G20 and the Financial Stability Board (FSB) have agreed on a range of outcomes. Without an overt capability to promote the adoption and enforcement of new regulations, these outcomes are “soft” in nature such as new forums, reports, and discussion papers:

* Finalised the Two-Pillar Solution to address the tax challenges arising from the digitalisation of the economy.

* Updated the 2022 G20/OECD Roadmap on developing countries and international taxation.

* Global Forum on Transparency and Exchange of Information for Tax Purposes updated the G20 on the implementation of the 2021 strategy on unleashing the potential of automatic exchange of information for developing countries.

* FSB report on decentralised finance (DeFi) and the FSB’s high-level recommendations for the supervision and regulation of so-called stablecoins and crypto assets.

* IMF Discussion Paper on macro-financial implications of crypto assets.

* Report on the financial stability aspects of commodities markets.

* Consultative Report on strengthening financial institutions’ ability to manage third-party risks and outsourcing, and financial authorities’ oversight of third-party risks.

We may see additional outcomes in the closing months of India’s presidency, which ends on November 30. Though the leaders’ summit in September will likely prove the most difficult, in terms of walking the tightrope between members’ interests and in leveraging the platform to further press Russia to withdraw from Ukrainian territory.

The world has not significantly changed due to India’s presidency of the G20. But the largest economies continue to meet and engage on key global issues while ensuring under-represented nations have a seat at the table. The true value of this year, as with any year that does not achieve dramatic outcomes, is the ability to quickly engage when faced with a crisis.

Richard M. Rossow is senior adviser and holds the Chair in US-India Policy Studies at the Center for Strategic and International Studies (CSIS), Washington, DC. Views are personal, and do not represent the stand of this publication.