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Editorial Articles

Issue No 33, 13-19 November 2021

Major Takeaways For India From G20 Summit

EN Team

The G20 summit concluded on 31st October 2021 with member countries adopting the G20 Rome Leaders’ Declaration. This was the 8th G20 Summit since 2014 and first in-person Summit since the Osaka Summit in 2019. The theme of the Summit held under Italian Presidency was 'People, Planet, Prosperity', with an overarching theme of recovery from the pandemic across pillars of health, economy, employment, education, tourism, and climate action. Prime Minister Shri Narendra Modi participated in all 3 Summit Sessions - on Global Economy and Global Health; Climate Change and Environment, and Sustainable Development. A lot of the agenda of developing countries, in which India has been taking a leadership role, has been brought into the text of the G20 Rome Leaders’ Declaration.

COVID-19: 'One Earth, One Health'

G-20 nations have endorsed India's position that extensive COVID immunisation is a global public good. Member countries have agreed on mutual recognition of vaccines, strengthening of the WHO to give faster approvals to vaccines and suspending debt servicing for developing countries till December 2021. In his intervention, Prime Minister Modi highlighted India's contribution to the fight against COVID-19 and spoke about New Delhi's vision of 'One Earth, One Health' saying this vision can become a great strength for the world to deal with any such crisis in the future. Mr. Modi conveyed that India is ready to produce over 5 billion vaccine doses by the end of next year. The G20 also acknowledged the importance of shared standards for seamless travel including testing requirements and results, vaccination certificates and mutual recognition of digital applications. India has been a strong advocate for equitable and affordable access to COVID-19 disease control tools, including vaccines and diagnostics through technology transfer, diversification of supply chains and production house.

Climate Goals

For the first time, the global leaders have identified sustainable and responsible consumption and production as "critical enablers" in achieving energy and climate goals. This is in line with Prime Minister Narendra Modi's vision of promoting the mantra of sustainable lifestyles all over the world.

Instead of only focusing on climate goals, India along with other developing countries was able introduce a language on what actions need to be taken, including by developed countries, to achieve these goals. The developing countries opposed the "inequitable call for net-zero by 2050” while noting a "lack of ambition" vis-a-vis climate goals on the part of major developed countries and their attempt to shift the goalposts of the Paris Agreement. Developed nations still have a much bigger carbon footprint than their poorer counterparts.

 Commerce Minister and India's G20 Sherpa, Piyush Goyal said that India has pushed for the inclusion of the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), enshrined in the UNFCCC and the Paris Agreement, as the basis for climate action. "India pushed for an explicit recognition that the goal of developed countries making available $100 bn per annum through 2020 has not been achieved, is expected to be met no later than 2023", he added.

 Another commitment made by the G20 in the direction of sustainable development is that the developed nations will put an end to the provision of international public finance for new unabated coal power generation abroad by the end of 2021. Instead, they will mobilize international public and private finance to support green, inclusive, and sustainable development.

Global Supply Chain Repair

The G-20 also responded to the mounting challenge of disrupted global supply chains. The globalized trade system is still reeling from the COVID-19 pandemic, leading to shortages and misaligned trade routes around the world.

During the Global Supply Chain Summit on the sidelines of the G20 Summit, Prime Minister Narendra Modi asserted that trusted sources, transparency and time-frame are three vital fields that regulate the global supply chain. Recollecting how during the initial months of the pandemic, countries felt the shortage of raw materials to produce vaccines, health equipment and essential medicines, Mr Modi noted that in the pursuit of economic recovery after the pandemic also, the supply problems of semiconductors and other commodities are coming in the way of healthy growth.

 "I believe that three aspects are most important to improve global supply chains - trusted source, transparency and time-frame. It is necessary that our supply must be from trusted sources. It is also important for our shared security. Trusted sources must be such that they do not have a reactive tendency so that the supply chain is protected from a tit for tat approach. For the reliability of the supply chain, it is also necessary that there must be transparency in it. Due to lack of transparency, today we are seeing that many companies in the world are facing the shortage of small things. If there is no timely supply of essential things, it may lead to bigger losses. We have clearly realized this in pharma and medical supplies in the Corona times. So to ensure supply within a timeframe, we have to diversify our supply chains. And for this, alternative manufacturing capacity will have to be developed in developing countries." - PM Narendra Modi during the Global Summit on Supply Chain Resilience.

 India has accelerated the export of vaccines to improve the global supply of vaccines. India is also working with Quad partners to supply better and affordable Covid-19 vaccine in the Indo-Pacific region. India is gearing up to produce 5 billion COVID vaccine doses for the world next year for which it is important that there is no hindrance in the supply of raw material.

Prime Minister Narendra Modi stated that while India is already a trusted source in IT and Pharma supply chains, it is keen to participate in the clean technology supply chain.

Farmers and Food Security

Another major takeaway for India and other developing countries is that the leaders have agreed in-principle to focus on improving the livelihoods of small and marginal farmers. India had insisted that policies must protect the interest of small and marginal farmers and conserve local food cultures, which in turn, will ensure food security. This calls for global efforts to foster sustainable and resilient food systems and agriculture innovations which are vital to eliminate hunger and poverty. The G20 Summit endorsed the Matera Declaration which calls upon the international community to build inclusive and resilient food chains and ensure adequate nutrition for all, in line with the "Zero Hunger" goal set for 2030. The Matera Declaration was adopted by the first joint meeting of the Foreign Affairs and Development Ministers of the G20 in June this year. The declaration focused on "accelerating the adaptation of agriculture and food systems to climate change, as increased climate variability and extreme weather events impact agriculture output and are among the forces driving the rise in global hunger while recognizing the importance of sustainable agriculture."

Global minimum corporate tax

G20 leaders have formally endorsed the global agreement for a minimum 15% corporate tax. The new tax regime will come into force in 2023, making it harder for multinationals to avoid taxation by shifting jobs and profits into low-tax havens. Information Technology has lowered barriers for trading without physical presence in a region. Historically, countries have sought to tax businesses conducted within their territories. This has been shaken up by the blistering pace of the internet. Hence, the new global taxation policy will also address the increasing digitalisation of global commerce by companies, in part, based on where they do business instead of where they book profits. The idea of levying a global 15 percent minimum corporate tax on companies that will make the global financial architecture more fair and just was first proposed by Prime Minister Narendra Modi at the G-20 Summit way back in 2014, according to Foreign Secretary Harsh  Vardhan  Shringla.

 "This is a very important step in ensuring more rationalised tax structures, and better cooperation in the international domain when it comes to issues like tax evasion, money laundering, corruption"- Foreign Secretary Harsh  Vardhan  Shringla.

 The G-20 Summit, an annual conference of leaders from 20 of the world's most influential countries, is meant as a forum for leaders to solve pressing economic and global issues. The group played an instrumental role in responding to the 2008 financial crisis and is a place of dialogue for major countries to negotiate on issues like trade, climate change, international security and, most recently, the COVID-19 pandemic.

(Sources: PIB, AIR, G20.org, official twitter handles of MEA, PMO)