With economy on rebound, Modi set for G20 summit debut

Eight summits and six years after it was born in the aftermath of the 2008 global financial crisis, the November 15-16 G20 summit in Brisbane, the picturesque gateway to Australia, could be a milestone in fructifying some key initiatives to restore global economic growth and create the much-needed equilibrium in the global economic order.

Restoring Global Growth

For India, there will be a lot riding on how some of the expected outcomes shape up in the G20 joint declaration on November 16. Like other G20 economies, India’s top priority will be to proactively spur the collective process of restoring the global economic growth to 2 per cent, and to ensure that this growth is not jobless, but create new opportunities for millions languishing without any viable employment across the world. Growth and job creation will also be the twin focus of India’s business-friendly Prime Minister Narendra Modi, for whom the Brisbane summit will be his first G20 experience as well as his first major global outing with leaders of the world’s most advanced and emerging economies.

Ahead of the summit, Mr Suresh Prabhu, India’s G20 sherpa, has flagged off key priorities of India at the G20 summit, which are expected to be reflected in Prime Minister Modi’s speech, and hopefully some of them will be concretised in the G20 joint communique. India’s Sherpa has stressed that New Delhi’s agenda will have an added traction at the Brisbane summit as the context has changed, with the Indian economy growing at a fast pace and a new prime minister in charge, who is committed to reigniting the India growth story. Against this backdrop, India’s efforts will be to enlist greater global participation and stimulating the flow of foreign investment to aid the larger project of infrastructure modernisation in the country. One can, therefore, expect Prime Minister Modi to highlight his pet ‘Make in India’ initiative on the global stage in his pursuit of making India a manufacturing powerhouse.

Remittances

With its 25 million-strong diaspora sending home $71 billion in annual remittances, reducing the cost of remittances will another key goal of India, and India is hoping for a concrete G20 outcome in this process. The leaders of G20 countries are aware that India is the single largest recipient of global remittances, and therefore a consensual decision on reducing transaction costs matters a lot to India. There is clearly a lot at stake for India here: even 1 per cent reduction in costs of remittances would mean an additional flow of $700 million for India (at the current rate of $71 billion remittances). Besides, this is the hard-earned money of Indian workers who toil hard in foreign lands, and send their savings back home, a point stressed eloquently by Mr Prabhu in his pre-summit briefing. “Many of our friends from Kerala, many of our friends who work in more than 50 degree centigrade. They work hard, send the money back to India which supports the Indian economy significantly because that reduces the gap of Current Account Deficit,” he said. India’s target is to reduce cost of remittances cost from 10 per cent to 5 per cent. “It is very ethical, logical, and very important that why should a worker who is working there should pay a bulk part of his money in order to remit money back home, just because the banking system does not operate in a proper manner,” he added.

India is also going to be proactive in pushing a global regime for automatic sharing of information to prevent black money and tax evasion and a new tax regime for multinationals, including global e-commerce giants who hide behind complex corporate structures.

Promoting energy security and energy efficiency will be high on India’s agenda. India is expected to press for a dialogue on global gas markets and strong collective action on climate change.

Reforming Global Governance

Last but not the least, recasting the global economic governance architecture, which remains heavily tilted in favour of the Bretton Woods institutions more than seven decades after they were created, will be high on India’s agenda. One can expect Prime Minister Modi to make a forceful pitch for reforming the global financial institutions to reflect the tectonic shift of power from the west to the east, by asking the leaders of advanced economies to honour their promise to implement the 2010 IMF quota and governance reforms. “The post-Cold War global economic governance order needs to be recast. It will be a major priority for India at the G20 summit in Brisbane,” Pinak Ranjan Chakravarty, former secretary (economic affairs), Ministry of External Affairs, India, told India Writes Network (www.indiawrites.org).

At a time when the economic growth across the world remains uneven and show stark asymmetries across geographies, India is going to the Brisbane summit on a high note, with a clear-cut message that India will contribute substantially to the global economic growth in the years to come, and hence it makes sense for the world to be on the side of the India story and global economic resurgence.

Author Profile

Manish Chand

Manish Chand is Founder-CEO and Editor-in-Chief of India Writes Network (www.indiawrites.org) and India and World, a pioneering magazine focused on international affairs. He is CEO/Director of TGII Media Private Limited, an India-based media, publishing, research and consultancy company.