By Snigdha Kalra
The G20 Summit, an annual meeting of 20 of the worlds largest economies, was held in Hamburg, Germany on July 7th-8th, 2017. Prime Minister Narendra Modi attended the Summit, along with leaders of other prominent countries including American President Donald Trump, British PM Theresa May, and Canadian PM Justin Trudeau.
The Hamburg Action Plan was adopted in the summit to address worldwide challenges including climate change, corruption, tax evasion and terrorism. It also commended Indias reform efforts.
India’s reforms
India has been doing well on the world stage since Prime Minister Modi came to power in 2014. The G20 Summits have marked continuous growth in Indias participation over the years. The PMs speeches have primarily focused on counter-terrorism, infrastructure development, and inclusive economic growth, effectively balancing the world economy with national interests.
However, despite this renewed focus, India was ranked at 130 in the World Banks Doing Business Rankings in 2016-17, which was only a one-rank improvement over the previous year. The government, however, hopes for India to reach 90th rank by 2017-18, and 30th by 2020.
Better rank in ease of doing business and greater awareness about opportunities in India in [the] manufacturing sector would lead to growth in the manufacturing sector, said an output-outcome framework document prepared by the government.
This year, it seems, the G20 are in agreement with India on its reform agenda. The Action Plan mentioned the various measures taken by the Indian government to organise the financial sector. It noted the increased prevalence of derivative instruments in electronic trading as well as promotion of External Commercial Borrowings (ECBs) as steps aimed at increasing financial stability and innovation. The Start-up India initiative of Modi was also praised. Labour market reforms aimed at job security and increasing the proportion of women in the workforce were also appreciated. They are in line with the inclusive growth agenda of G20.
International interactions
Prime Minister Narendra Modi interacted with various global leaders during the two-day summit. He met with Norways Prime Minister, Erna Solberg, and furthered the agenda of infrastructure investment in India by inviting Norwegian pension funds to invest in National Investment and Infrastructure Fund (NIIF).
Modi also met with Italian Prime Minister, Paolo Gentiloni, promoting bilateral trade and investment relations and economic cooperation. Afterwards, he held meetings with Japanese Prime Minister Shinzo Abe, Canadian PM Justin Trudeau, South Korean President Moon Jae-In and Argentinas President Mauricio Macri. There was also an impromptu interaction with Donald Trump.
India has also been hoping to improve diplomatic relations with China. However, the refusal of China to accept that a bilateral meeting took place between Modi and Chinese President Xi Jinping says another story on their side.
The FSB report
Ahead of the G20 Summit, the Financial Stability Board (FSB) had submitted a report on countries’ progress in financial reforms. According to the report, India comes under the list of compliant and largely compliant countries in the implementation of reforms such as shadow banking, Net Stable Funding Ratio (NSFR) and development of derivatives market.
The FSB is an international institution that monitors the global financial system. These recommendations and reports act as a check of whether the objectives of G20 reforms are being fulfilled, and to what extent. A letter by FSB chairman Mark Carney says that the G20 reforms are building a safer, simpler, fairer financial system and banks are considerably stronger, more liquid, and more focused.
Good signs for the future
India has been on a reform spree under the Modi government. The introduction of GST is only set to aid Indias aims of increased financial stability, ease of doing business and a better standing in the world economy.
The bilateral interactions with world leaders are also a step forward in improving international relations. The main focus of India is to enhance trade relations and bring foreign investment to the country. Modi hopes to boost the economic relations of India with other countries.
The new World Bank rankings will be released in a few months. In such a situation, the lauding of Indias efforts at the G20 Summit is a positive indication that Indias rank may be improved this time. This will further strengthen Indias role on the world stage. Meanwhile, the reform agenda is here to stay.
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