G-20 Summit: Advantage India?
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Read General Awareness Topic : G-20 Summit: Advantage India?
G-20 is a group of world’s largest economic powers which include 19 countries and the European Union (EU) and its most important objective is the strengthening of global economic and financial cooperation and decision making. G-20 has become one of the most significant international body that accounts for 85% of the global GDP, 75% of the world trade and about two-third of the world population.
In 1999, the Finance Ministers and Central Bank governors of 20 major countries met to discuss the aftermaths of Asian Financial Crisis and thus the G-20 was born. In 2008, the first G-20 summit was held at Washington DC in the US. Since then, the stature of G-20 is continuously increasing and in 2009, world leaders announced that G-20 will replace G-8 as the most significant group of wealthy nations.
The theme of 2016 G20 summit which was held on September 4-5 at Hangzhou in China, was ‘An Innovative, Invigorated, Interconnected and Inclusive World Economy’. With India being the fastest growing major economy in the world, its role will be instrumental in materialising the theme of the summit.
Some of the major takeaways which are advantageous for the interests of India are as under –
- The communique of the G20 summit agreed that terrorism and conflicts complicate the global economic outlook. With terrorism being utmost security issue for the Indian establishment, its acknowledgement in the G20 communique is the acceptance of Indian concern. India also appreciated the G-20 initiative on combating the Financing of Terrorism.
- Initially, the communique calls for the ratification of Paris Agreement on Climate Change by the end of 2016. But since India and other developing countries which are at the take off stage of economic development cannot afford to fully implement the Paris Agreement. Poverty alleviation is also as important as the environment protection. Therefore, the despite the pressure from the US and China, final draft skipped the mention of 2016 deadline and called for the ratification by member states as soon as possible.
- The Communique also avoided any mention of deadline for the abolition of fuel subsidies. The Liquefied Petroleum Gas (LPG) comprises the bulk of fuel subsidy in India and it is used as cooking fuel by the bulk of its middle and lower class population. Though international fuel prices are consistently on lower trajectory, any sudden abolition of fuel subsidy will jeopardise the food security in India.
- The G-20 reaffirmed its commitment to refrain from competitive devaluation that leads to the volatile and disorderly movement of exchange rates. The artificially devalued currencies are detrimental for the growth of Indian exports.
- Innovations will not only play a deciding role in the future growth but will also create the new drivers of growth. Innovation is key for catapulting the Indian economic growth which unable to reach the 7% mark in the past few years. The G-20 communique endorsed the G-20 Blueprint on Innovative Growth as a new agenda which will act in accordance with the circumstance of the each nation.
- The G-20 Communique called for broader participation of the International Monetary Fund (IMF) membership along with the IMF quota and governance reforms. IMF quota reform is a long-lasting demand from India.
- G-20 agreed to cooperate on Base Erosion and Profit Shifting (BEPS). India vehemently called for measures to check BEPS to non G-20 countries. BEPS refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.
During the summit, India was able to successfully raise its concern which were duly acknowledged at the G-20 platform.
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