Preparing for the presidency

India must not lose G20 opportunity

In just a few short months, India will be taking over from Indonesia the presidency of the Group of 20 (G20) nations. 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 itself are far from being done with. And the freezing relations between Moscow and Western capitals have rendered the G20 even more divided than it was previously. Nevertheless, it remains the only effective multilateral game in town, and India must shoulder its responsibility as president. It will also be noted that 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.

By this point in time, the agenda of any incoming G20 president is usually well developed. This is not entirely the case with India. The usual dysfunction of the Indian government — with multiple silos that are working together only as an afterthought — is multiplied in this case. The G20 sherpa was until recently the Union commerce minister; that role will now be taken by the outgoing chief executive officer of the NITI Aayog, just months before the presidential handover. A former foreign secretary is running a G20 secretariat; a sous-sherpa has been appointed from within the foreign ministry. Meanwhile, the finance track of the G20 remains technically the business of the Union finance ministry. The sherpa track of the G20 is typically where more new ideas are introduced by a presidency; the finance track where the regular business of keeping an eye on macro-economic stability is conducted. The most effective G20 presidencies of the past ensured there was close co-ordination between the sherpa and finance tracks. The political leadership must ensure that this is also the case over the coming months in New Delhi. One fear is that India will be both under-prepared, in the sense of having minimal policy preparation and expertise on offer, and also over-prepared, in the sense of having too many centres of power and responsibility in the G20 effort.

The next few months will be crucial. A collegial approach in which the three crucial ministers —foreign, finance, and commerce —together work with the new sherpa and the prime minister’s office to create a coherent and interlinked strategy for both the sherpa and the finance tracks is essential. For India, the payoff might be large. It is possible to get major Indian priorities — in particular, reform of the multilateral development banks and principles for digital payment systems — on to the global agenda. These might have major downstream implications for growth, investment, climate finance, and jobs in India and other developing countries. The next G20 presidency after India is to be Brazil’s. Thus, the “troika” of past, present and future G20 presidents — responsible for agenda continuity — will for the first time be from developing nations, with India in the middle. This is an opportunity not to be missed if the global financial and regulatory system is to be redrawn to serve the interests of the emerging world. Substantive planning, rather than image-building, must be the priority over the next couple of months.