According to experts, G20 Presidency is helping India deepen trade ties with other member nations and provides an opportunity to attract investments from those countries in sectors like infrastructure. They said that the G20 (Group of 20) holds a strategic role in securing future global economic growth and prosperity, as its members represent about 85 per cent of the global GDP (Gross Domestic Product), 75 per cent of global trade and two-thirds of the world’s population.
Presiding over this multilateral forum is an opportunity for India as it can showcase its strength and achievements for attracting investment and deepen its trade relation with these large economies, the experts added. Fast-tracking negotiations for free trade agreement, ease of doing business, development of modern infrastructure, skilled manpower, large population with growing income are some of the positives which help India to enhance trade realisations with these member countries. The G20 has 43 members and not 20 countries. These include 19 countries (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, UK and US) and the European Union (27-member group). Three EU countries — France, Germany, Italy — are counted among the 19 countries.
Trade experts suggested the government to fast-track ongoing negotiations for free trade agreement (FTA) with countries like the UK and EU as it would help India in better market access to these countries as well as facilitate investment. However, they also asked not to use trade platforms to achieve climate aspirations as that could harm progress in both trade and climate discussions. The largest trade block of G20, the EU, will set in motion the carbon border adjustment mechanism from October 1 this year, making exports expensive from countries like India.
“In the first eight months of 2023, the EU introduced five regulations on climate change and trade. The G20 nations should ignore this elephant in the room and discuss before individual countries rush to the WTO (World Trade Organisation (WTO). This may soon unravel world trade,” think tank Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said. Shardul S Shroff, Executive Chairman, Shardul Amarchand Mangaldas & Co, said that India should find a common ground with G20 countries to emerge as a global norm setter for the digital economy and use that global stature to boost IT and IT-enabled services exports.
India should position itself as the global norm-setter for various aspects of the digital economy, such as data protection, international contracting, digital assets, and international taxation, as it would help expand India’s footprint in the global services exports market, Shroff said. Gaurav Dani, Founding Partner, INDUSLAW, said that India has the largest growing middle-income population offering a last consumer base for both goods and services and due to this global firms will continue to invest in India. Sharing similar views, Rumki Majumdar, Economist, Deloitte India, said that many multinational firms are looking for alternate destinations for investment and diversifying supply chains, and the G20 Presidency will help India attract many such companies.
Massive improvement in infrastructure, ease of doing business, skilled labour force and growing market with large middle class consumer base are some of the key indicators that make India one of the most attractive places to invest and import quality goods, Hi-Tech Group Chairman Deep Kapuria said. Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said India’s trade with G20 countries will grow at an accelerated rate because of the comfort and confidence created in the members due to the multiple events organised by India in different cities.
“This helped in showcasing the country as a whole. The G20 Presidency has thrown up many opportunities in diverse sectors for India. It is now for India to grab this opportunity. India should consider converting G20 in an economic block, a shade lower than free trade, maybe, reduced custom duties among the group members,” Saraf said. Among the G20 members, India holds ninth position in terms of total trade (USD 1,662 billion) in goods and services in 2022. The EU (17,151 billion), China (USD 7,183 billion) and USA (6,933 billion) hold top three spots.
Share of G20 nations in India’s merchandise export in 2022 stood at 64 per cent and import at 52.4 per cent. India’s leading export destinations among G20 nations are USA (USD 91 billion), EU (USD 87 billion), China (USD 17.5 billion), UK (USD 14.4 billion), Turkey (USD 10.7 billion) and Saudi Arabia (USD 10 billion). The country’s suppliers include China (USD 118.5 billion), EU (USD 59.1 billion), Saudi Arabia (USD 43.3 billion), USA (USD 38.4 billion), Russia (USD 34 billion), Australia (USD 19.2 billion), Korea (USD 18.9 billion), and Japan (USD 13.9 billion) during the last year.
Sector wise, India’s top exports to these member countries in 2022 included electronics and machinery (USD 41.3 billion), petroleum products (USD 30 billion), cut and polished diamonds and gold jewellery (USD 25.9 billion), organic chemicals (USD 20.5 billion), medicines (USD 16.4 billion), automobiles parts (USD 11.8 billion). The main import items included electronics (USD 46.6 billion), machinery (USD 42.5 billion), petroleum products (USD 40.6 billion), organic chemicals, APIs (USD 18.9 billion), rough diamonds and gold (USD 17.6 billion), plastics raw materials (USD 13.0 billion), and iron and steel (USD 12.8 billion).
In terms of foreign direct investments (FDI), the US is the biggest investor with USD 61.3 billion or nine per cent share in India’s FDI during April 2000-June 2023, when it was aggregated at USD 645.4 billion. It was followed by Japan with USD 40 billion or 6 per cent contribution; UK (USD 34.3 billion) or 5 per cent share; Germany (USD 14.25 billion) or 2 per cent share, and France (USD 10.62 billion) or 1.64 per cent.
(With inputs from PTI)