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India’s Economic Triumph and the G20 Presidency

India’s G20 presidency ended on November 30, 2023, but its impact will have a lasting impression on the country’s economy and the world. India has been so far successful in projecting its soft power and cultural diversity in the most robust manner. India’s diplomacy has a global reach and is guided by an active policy. Its international standing has strengthened. The G20 Summit has been significant in influencing how foreign investments are made in India. As reiterated by our Sherpa Shri Amitabh Kant, the fastest-growing India’s presidency has truly been inclusive, ambitious, action-oriented, and decisive. The world’s largest democracy and the fastest-growing economy have made a significant mark in the history of the G20.

A strategic and well-thought-out foreign policy is critical for having a voice on international platforms, and one such is the Group of 20 (G20). It is a must for effective trade and investments and for achieving consistent domestic progress. India’s foreign policy has chartered a path that enhances its strength, protects its core interests, and ensures India’s continued upward trajectory as a fast-growing and inclusive economy with a rising profile in global affairs. This has been achieved despite the unforeseen challenges posed by the COVID-19 pandemic and disruptions caused by armed conflicts (MEA, August 2023).

The country assumed the presidency at a critical time when the world was recovering from pandemics, wars, and various geopolitical disturbances. It has remained resilient through all of these. Since its inception, the G20 has never been a merely economic grouping. Over time, G20 members broadened their horizons, and the discussions held in the meetings today include climate change, carbon emissions, renewable energy, and economic issues. The presidency had yearlong working group meetings with sherpas, governors, and delegates, followed by the G20 Leaders’ Summit in New Delhi. The summit has been historic because coming up with a joint declaration has been a remarkable feat and calls for applause from India’s diplomats and leaders.

According to Australia’s Department of Foreign Affairs and Trade, the G20 brings together the world’s major and systemically important economies. Its members represent 85% of global GDP, 75% of international trade, and two-thirds of the world’s population. The G20 is considered to have a strategic role in shaping global economic order and stability.

One of the important tracks of the G20 working group is the Finance Track, which includes discussions on trade, investments, multilateralism, and commerce. It has helped New Delhi foster trade ties with G20 members and invitee countries. Among other things, the G20 Trade and Investment Working Group has been pushing for robust trade, increasing MSME involvement in trade, and developing logistics.

India’s strategic economic reforms have increased the country’s appeal to international investors. It has conducted bilateral meetings and dialogues to enhance the existing financial architecture, availability of skilled manpower, and ease of doing business in India by promoting make-in India to attract foreign investments in the country. This multilateral forum has been significant on various other fronts as well, other than finance and diplomacy.

India’s digital public infrastructure is much appreciated, and its success in Unified Digital Payments (UPI) is world-renowned. India is home to one of the largest bases of a growing middle-income population, which makes it an investment hub for the increased and limited supply of goods and services. India is being considered one of the most sought-after destinations for investment by many developed and developing nations.

India has successfully conducted over 200 G20 meetings in about 60 cities; this number itself is huge. This shows the country’s potential to organise high-level events in diverse locations and position the smaller cities on the global map. The major objectives of India during these meetings were financing tomorrow’s cities and establishing them as engines of economic growth. The meetings have resulted in accelerated economic growth, with major financial influxes in these cities, improved infrastructure and connectivity, employment generation, branding of the locations, and, most importantly, locals being involved in the various events. India is becoming an interesting destination for tourism and investments, and with these interventions, the G20 has been a people’s movement for India. In the hospitality industry, even the smaller cities have seen unprecedented outcomes from the G20 events.

India is one of the fastest-growing economies not only among the G20 nations but in the world. The country’s rapid economic growth in the last decade has become a topic of discussion among many. Foreign Direct Investment (FDI) has increased in the country at a very fast pace. According to the experts, FDI reached a new record level of USD 85 billion in the 2021–22 fiscal year. The year 2023 has been momentous on many fronts, and the FDI received in the year 2023 is too impressive. It is to be mentioned that the G20 has played a key role in this growth, and now it will be interesting to see how countries will take this momentum forward. There have been a few disturbances in the domestic market due to disruptions in global supply chains, resulting in inflation, but it seems moderate now. This is all strengthening India’s foreign reserves, and it is emerging as a major player in the global arena along with realising its domestic economic aspirations.

The country has been a “Voice of the Global South” and has leveraged the G20 platform as a stimulus for change. The inclusion of the African Union (AU), which represents its 55 member states as a permanent member of the G20, is an example to quote. The G20 also had various engagement groups other than working group tracks, and one of the biggest of them was B20 (Business Engagement Group). Over the course of the year, B20 India has arranged more than 100 policy dialogue events throughout the nation, with significant international involvement. The theme on which B20 worked was RAISE—responsible, accelerated, innovative, sustainable, and equitable businesses. For instance, several activities were organised in Northeast India, and leading international companies participated in discussions that would entice B20 companies to investigate fresh prospects in the region.

This is an excellent development since it shows that international cooperation is becoming more and more important in encouraging investments that help the G20 countries achieve their economic objectives. In response to China’s “Belt and Road” plan, India established the India-Middle East-Europe economic corridor as a global endeavour during the New Delhi Leaders’ Summit. A designated area or route with the goal of promoting investment, trade, and services between nations or regions is known as an economic corridor. The G20 members also decided to establish an International Biofuel Alliance, showcasing their commitment to clean energy transitions and reducing their reliance on carbon-based fuels, which majorly contribute to global warming.

As rightly articulated by Nalim Mehta, India’s soft power is no longer limited to the strength of its ancient culture, traditions, and hospitality. Its digital revolution has added a powerful new lever of influence to this quiver. Given that it demonstrates India’s growing stature and picture on the world stage, the country’s celebration of its G20 Presidency can be interpreted as an example of its rising soft power. India has tried to strengthen ties, acquire new partners, and improve its image with the support of the G20 presidential year. It has been evident that India has leveraged the G20 platform to reflect its independent foreign policy, which is motivated by its growing economic power.

Robust diplomatic ties between all countries are more important than ever due to growing globalisation and interdependence between them. Economic diplomacy is of foremost importance when it comes to managing a country’s trade and investment relations with the rest of the world, thus accounting for FDI inflows. In recent years, India has achieved some important landmarks in its foreign policy sphere. The country’s foreign policy is considered the strongest of all times, and this has led to its increased soft power influence not only in the Indo-Pacific but in the western world too.

India, being the only major global economy slated to have 6+% GDP growth figures in the years ahead, outpaced Britain last year to become the fifth-largest economy in nominal GDP terms (Invest India), and it comes when the West is facing considerable economic crises. The world today is facing considerable economic challenges. India now has a greater responsibility as it aims to become the 3rd largest economy by 2030, and it advocates Security and Growth for All in the Region through its SAGAR initiative. It must be the voice of Small Island Developing States (SIDS) and Least Developed Countries (LDCs) in the Indo-Pacific region.

The increasing geopolitical hustle on these islands is alarming and must be taken into consideration. India’s influence has been overarching and can be understood by the overwhelming response received from the G20 delegation and a successful G20 summit. India is being considered an emerging power and a partner in regional cooperation and development. Countries’ foreign policies are closely integrated with their security and development priorities. India, being a developing country, has a clear mandate to advance its diplomatic as well as economic ties with the littorals.

In its latest report, the International Monetary Fund (IMF) has praised Indian authorities for their robust economic development. The Indian government has demonstrated a strong commitment to implement structural reforms that promote investment and growth. The country is positioning itself as a reliable investment destination, and in doing so, it is poised to accelerate its domestic economic objectives.