G20 Delhi Summit: A global leap forward for Economy, Equity & Environment
The iconic G20 Summit in New Delhi concluded on September 10, with PM Narendra Modi handing over the gavel to the Brazilian president Lula Da Silva, even as India’s G-20 Presidency continues till the end of November this year. It was in all ways a grand success for India’s diplomacy, bilateral relations with key partners and international stature as a force for positive change.
The G20 New Delhi Leader’s Declaration was undoubtedly the highlight development that stamped the success of the event. But simultaneously, India held several bilateral and multilateral events with partner countries, utilising the platform to make a number of pivotal announcements. IBT analyses the four key announcements at this year’s G-20 that hold the most significance for India and the world.
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The G20 Summit being held in New Delhi concluded on September 10, with PM Narendra Modi handing over the gavel to the Brazilian president Lula Da Silva, even as India’s G-20 Presidency continues till the end of November this year. It was in all ways a grand success for India’s diplomacy, bilateral relations with key partners and international stature as a force for positive change.
The energy and enthusiasm was palpable as India hosted some of the world’s most influential leaders at the Summit held at the International Exhibition-cum-Convention Centre (IECC) complex, also known as Bharat Mandapam. The G20 New Delhi Leader’s Declaration was undoubtedly the highlight development that stamped the success of the event. But simultaneously, India held several bilateral and multilateral events with partner countries, utilising the platform to make a number of pivotal announcements. While we will endeavour to analyse these announcements in greater detail in upcoming coverage, we present to you the four key announcements at this year’s G-20 that hold the most significance for India and the world.
G21 – It’s time for Africa!
The addition of Africa to the G-20 is a pivotal declaration at this year’s summit. And what better time for this development than India’s G-20 presidency, considering how India has long championed the cause of the global south. In fact, the initiative was taken by PM Narendra Modi in June when he proposed Africa’s inclusion as full member to other G-20 leaders. The atmosphere was undoubtedly jubilant as Union of Comoros President and AU chairperson Azali Assoumani took the seat as a full member of the G20 after this historic announcement by PM Narendra Modi.
The African Union comprises 55 member states from across the African continent with a population of around 1.43 billion. External Affairs Minister S. Jaishankar strongly supported this step, at the Business 20 platform, stating, “Due to factors such as scale, subsidies, technology, human resources and strategic choices, the nations in the bloc comprising countries in Asia, Africa, the Caribbean and Oceania had largely been reduced to being a consumer rather than a producer of goods… Their contribution very often was to provide resources for manufacturing elsewhere. They not only did not reap the full benefits of the economic change but often ended up saddled with unviable debts, emanating from opaque initiatives.”
Even without Africa, the G20 comprises 19 countries and the European Union, with members representing around 85% of global GDP, more than 75% of global trade and about two-thirds of the world population.
Africa is a valued trade and investment partner for India. During 2017-22, India’s exports to Africa have increased at a CAGR of 15.3% to reach US$ 49.6 billion in 2022. Imports, on the other hand, have grown at a CAGR of 8.2% during the period to reach US$ 53 billion in 2022.
Source: ITC Trade Map, figures in US$ billion
India’s trade basket shows a strong resource dependence on Africa, with over half of the imports comprising mineral fuels and oils (HS 27). India also sources heavy quantities of fertilisers, inorganic chemicals, copper, ores and iron & steel. Besides this, India has taken a proactive role in the development of Africa. In fact, it is the second largest provider of credit to Africa after China, providing around US$ 12 billion in credit to 42 African nations. It is also among the top 5 investors in Africa, with cumulative investments of around US$ 74 billion since 1996.
Given the potential and promise of Africa in the coming years as a major partner in global economy and geopolitics, its entry into the G20 has immense significance for India and the world.
A greater stake in Net Zero goals
Unsurprisingly, climate change was a key item on the G20 agenda and also a crucial part of the final outcome. The members reiterated their commitment to limit the increase in global temperatures to 1.5 degrees C by 2030, as compared to 2 degrees C. This requires strong reduction in greenhouse gas emissions by 47% in 2030 compared to 2019.
The countries also committed to collective action to embrace sustainable production and consumption patterns and mainstream lifestyles for sustainable development.
The declaration recognized the importance of accelerating the efficacy of concessional resources, such as those of the multilateral climate funds, to help developing countries’ implementation of the Paris Agreement. It also called for an ambitious second replenishment process of the Green Climate Fund for the 2024-27 programming period. UK PM Rishi Sunak announced the country’s largest ever aid of US$ 2 billion for the green climate fund.
Besides this, the leaders noted the need for USD 5.8-5.9 trillion in the pre-2030 period for developing countries, in particular to implement their NDCs, with an additional requirement of US$ 4 trillion per year for clean energy technologies by 2030 to reach net-zero emissions by 2050. The parties have also decided on an ambitious, transparent and trackable New Collective Quantified Goal (NCQG) of climate finance in 2024, from a floor of US$ 100 billion a year, taking into account the needs and priorities of developing countries in fulfilling the objective of the UNFCCC and implementation of the Paris Agreement.
On the flip side, however, even as the nations encouraged tripling of renewable energy capacity by 2030, there was no agreement on ending the construction of new coal-based power plants. This is a crucial area in need for consensus, given that G20 accounts for 93% of global coal power plants and 88% of new unabated power plants.
Global Biofuels Alliance
Prime Minister Narendra Modi, along with the leaders of Singapore, Bangladesh, Italy, USA, Brazil, Argentina, Mauritius and UAE, launched the Global Biofuel Alliance on September 9, 2023, on the sidelines of the G20 Summit in New Delhi.
The Alliance intends to expedite the global uptake of biofuels by:
- Facilitating technology advancements
- Intensifying utilization of sustainable biofuels
- Shaping robust standard setting and certification through the participation of a wide spectrum of stakeholders.
It will also act as a central repository of knowledge and an expert hub. GBA aims to catalyse global collaboration for the advancement and widespread adoption of biofuels.
According to the Indian Biogas Association, the Biofuel Alliance can generate opportunities worth US$ 500 billion in the next three years for G-20 countries, as reported in PTI. It claims that bioenergy/biogas has the potential to replace fossil fuels completely, at least in the transportation sector. The end product from biofuels is around 95% carbon free on an average. Used cooking oil, animal fats, imported crude vegetable oils and Jatropha seeds can be used to manufacture alternative fuels like biodiesel. However, India only contributes around 1% to global biofuel production.
The government has set a target of 20% ethanol blended petrol by 2025, for which it is encouraging industry to set up factories for manufacturing ‘green fuel’ based on dual feed stock (sugar and grains). The Alliance is expected to be particularly beneficial to the transportation sector that faces the double challenge of rising fuel prices and strict emission norms.
India-Middle East-Europe Corridor
Prime Minister Narendra Modi and US President Joe Biden co-chaired a special event on Partnership for Global Infrastructure and Investment (PGII) and India-Middle East-Europe Economic Corridor (IMEC), on September 9 on the sidelines of the G20 Summit in New Delhi.
It was also attended by leaders of the European Union, France, Germany, Italy, Mauritius, UAE and Saudi Arabia, as well as the World Bank. The PGII is a collaborative effort by G7 nations to fund infrastructure projects in developing nations.
The focus of the event was to unlock investments and strengthen connectivity in various dimensions between India, Middle East and Europe. Participating countries signed a MoU on the IMEC, which comprises of an Eastern Corridor connecting India to the Gulf region and a Northern Corridor connecting the Gulf region to Europe. It will include a railway and ship-rail transit network, hydrogen pipeline, high-speed data cable and road transport routes.
A White House release affirmed, “The IMEC will be comprised of two separate corridors, the east corridor connecting India to the Arabian Gulf and the northern corridor connecting the Arabian Gulf to Europe. It will include a railway that, upon completion, will provide a reliable and cost-effective cross-border ship-to-rail transit network to supplement existing maritime and road transport routes – enabling goods and services to transit to, from, and between India, the UAE, Saudi Arabia, Jordan, Israel, and Europe.”
The IMEC promises unprecedented connectivity for India to the Middle East and Europe, and also puts it firmly on trade routes from Southeast Asia to the Gulf, West Asia and Europe. It is expected to add additional Asian countries and help boost manufacturing, trade, food secu rity and supply chains. Besides this, it will enhance telecommunications and internet access and promote clean energy technology.
Interestingly, the MoU lays down political commitment for the corridor, but does not create any rights or obligations under international law. The member countries have decided to meet within 60 days to develop an action plan and also set implementation time tables accordingly.