GLOBAL economy is in the midst of turmoil. Already weakened by the Covid 19 pandemic, nations worldwide have been witnessing several shocks that have led to concerns -higher than expected worldwide inflation triggering tighter financial conditions, slowdown in China and negative impact of the war in Ukraine.

The International Monetary Fund in its July 2022 report lowered global growth outlook as well as India's for FY23. The multilateral agency projected India's growth rate at 7.4 percent saying that this revision mainly reflects "less favourable external conditions and more rapid policy tightening."

Amidst the economic and political headwinds, India will be taking on a new role in a few months. The country will hold the Group of 20 nations' (G20) Presidency from 1 December 2022 to 30 November 2023.

G20 comprises of the world's major developed and developing economies, accounting for 85 percent of global Gross Domestic Product (GDP), 75 percent of international trade and two-thirds of the world population, making it the premier forum for international economic cooperation.

On 1 December 2021, India joined the G20 Troika of Indonesia, Italy, and India - the current, previous and incoming G20 Presidencies, respectively. As a Troika-member, India is working closely with Indonesia and Italy to strengthen the G20 agenda. India will assume the G20 Presidency in December from Indonesia, and will convene the G20 Leaders' Summit for the first time in India in 2023.

Why is it important?

G20, an Effective Multilateral Forum - With United Nations becoming less effective in finding impactful consensus and forums like G7 not including many of the powerful nations in today's context, G20 offers a more efficient and effective forum to tackle global crises.

India as Powerful Influencer - It opens an opportunity for a new level of influence, wherein India can set and drive the agenda across areas. It allows for legacy outcomes, both for India's strategic positioning and contributing to collective action. Like the Saudi G20 Presidency in 2020 added cyber security to the digital agenda and made it a priority under the Digital Economy Task Force.

Take a Leading Role in a Fragmented World - UK and French Presidencies led G20 response to Financial Crisis and its aftermath. In the current scenario, India could push for global consensus on key issues like guidelines for critical infrastructure protection or equal Covid vaccine access. This would showcase India as global leader with ability to drive consensus,and bridge divides between developed and developing world, and East and West

Push for Developing World and Regional Interests - Next year, the troika of the preceding, current, and succeeding presidents will be three developing countries: Indonesia, India, and Brazil. This fortuitous alignment is a chance to voice the interests of the Developing World countries and India's own region (South Asia) . Example- For India, financing of global initiatives - e.g., Sustainable Development Goals (SDG) financing - could be a new and success defining agenda item. Also, as Sri Lanka's neighbour, India would be remiss if it fails to address the risks of social instability in countries with acute debt distress.

Leverage G20 Exposure to Shine in Domestic Debate - India's G20 year, 2023, will conclude with a Leaders' Summit, which will be just a few months before the Lok Sabha election of 2024.

Championing Causes that also Promote National Interest -As part of representing Developing World agendas' India will look at promoting important elements of India's own concerns. For instance, India is poised to replace China as the most populous country in the world by 2023. Employment for such a large population of young labour pool is a concern. As president of the G20 grouping, India could bring in a stronger focus on ‘decent work' (goal number 8 in the SDG) to ensure significant progress.

Risk Factors

Problem of Plenty - Since its inception, G20 has evolved in to a multi-topic forum. For effective implementation, India has to zero in on select initiatives to drive meaningful results in the area. Also, the troika has to focus on continuity to ensure the work and its impact continue beyond the one year of Presidency

Geo-Political Tensions - This presidency comes at a fraught moment internationally. The Russian invasion of Ukraine and consequent Western sanctions have sent up the prices of food, fuel, and commodities; inflation and debt have skyrocketed. The effects of the pandemic are far from over. Amid fears of a global recession, the widening net of Western economic sanctions has led to additional pressure on emerging economies. Also, the freezing relations between Moscow and Western capitals have rendered the G20 even more divided than it was previously .

India-China border tensions can also have negative implications for cooperation in multilateral fora. India's plans to hold the 2023 G20 meetings in Jammu and Kashmir and Ladakh are at risk of becoming another divisive issue, with Pakistan lobbying other countries to boycott the meetings in view of the venue.

Preparations for G20 Presidency

Created in the backdrop of the financial crisis of the late 1990s, G20's key aim was to secure global financial stability by involving middle-income countries. But over the years, non-financial topics have also gained increasing relevance.

The G20 has no permanent secretariat. The agenda and work are coordinated by representatives of the G20 countries, known as ‘Sherpas', who work together with the finance ministers and governors of the central banks.

Every rotating G20 Presidency also serves as the G20 Secretariat for the year. Accordingly, the Indian government, on 15 February 2022, approved the setting up of a G20 Secretariat , manned by officers and staff from the Ministry of External Affairs, Ministry of Finance, and other concerned Ministries/Departments dealing with G20 subjects.

It is responsible for arrangements and implementation of decisions needed for steering India's forthcoming G20 Presidency, under the overall guidance and direction of the Prime Minister and concerned Ministers. India recently said ex-NITI Aayog CEO Amitabh Kant would be the G20 Sherpa after Piyush Goyal .

India's G20 work will be complex, multi-departmental and multi-sectoral effort. Having a central entity to coordinate content between the Sherpa and Finance track would be beneficial.

Going Forward

A look at the Ministry of External Affairs' priority concern areas and other potentially relevant areas reflects the emergence of three core topics -

Next Phase of Global Growth - Data for development and digital economy, SDGs, trade challenges, risks and mitigation, etc.

Sustainability - Including climate finance, sustainable lifestyles, climate technology and circular economy

Strengthening Global Cooperation - Supply chain resilience, energy security, fugitive economic offenders, food security

Most of the topics are not new in the G20 context and these are diverse across multiple dimensions. The relevance and nature of success will depend on the narrative and specific initiatives to be proposed by the Indian Presidency and its ability to drive consensus among the participating members to achieve the milestones on ground.

Prime Minister Modi led government's choice of Jammu and Kashmir and Ladakh as the venue for the 2023 G20 meetings shows the government will cash in on this opportunity to cater to both national and international interests, playing it up in the run up to the 2024 elections. How effectively government uses this platform will significantly impact geo-political and economic dynamics in the domestic arena, just as well as globally.