India at Osaka: Strong and balanced
From digital trade and anti-corruption regulations, and environmental policies to economic advancements, India took a strong stand at the Osaka G20 Summit. Former ambassador Bhaswati Mukherjee highlights a few key points
Conceived as an international mechanism for governance of the global economy, the G20, which includes all the major economies, has, over time, evolved into one of the most powerful economic and financial groupings. Formally known as the “Summit on Financial Markets and the World Economy” and representing more than 80 per cent of global GDP, the G20 has made continuous efforts toward achieving robust global economic growth. At the recent summit, the focus has shifted to include a wide range of global issues, including climate change and energy, health, counter-terrorism and migration.
The G20 Summit held on June 28 and 29, 2019, in Osaka, Japan, was the first one to be hosted by Japan under Prime Minister Shinzo Abe. Eight themes had been selected for discussion including “Global Economy”, “Trade and Investment”, “Innovation”, “Environment and Energy”, “Employment”, “Women’s empowerment”, “Development” and “Health”. While the summit was overshadowed by the US-China trade war, for India, it marked strong diplomatic successes. From standing his ground in face of pressure from the US, resisting changes in digital trade supported by over 50 nations and highlighting the issue of corruption, Prime Minister Narendra Modi emerged as a strong voice. What was also notable was his perfect balancing act when it came to bilateral engagements with major superpowers. PM Modi held a series of meetings with world leaders, individually and in groups, on the sidelines of the summit. The PM held meetings with the presidents of China and Russia, and with US President Donald Trump and Japanese premier Shinzo Abe.
India’s perspectives were highlighted by India’s “sherpa” to the G20, the then Union Commerce Minister Suresh Prabhu, in his media interaction after the summit. A “sherpa” refers to a personal representative of a head of state who prepares ground for him or her at international meets. India’s concerns included the importance of quality infrastructure and in global finance to a commitment in applying recently-amended Financial Action Task Force (FATF) standards for virtual assets. Anti-corruption measures at a global level were underlined. On climate change, India addressed the issue of mitigation as well as adaptation. Migration, which is a human challenge, was extensively discussed. Finally, PM Modi highlighted the role of India’s new innovation (“Sabka Saath, Sabka Vikaas”) into making changes in a manner that benefits all.The Osaka Communiqué largely meets these key concerns, including the tricky issue of climate change. A separate paragraph was inserted in the Osaka Declaration to bring the US on board. It states inter alia: “The United States reiterates its decision to withdraw from the Paris Agreement because it disadvantages American workers and taxpayers.”
Digital trade standoff
Another contentious issue was the initiative by Japan to circulate a “take-it-or-leave it” text on digital trade to all the G20 countries seeking approval of the Osaka Track for promoting plurilateral negotiations among 50 countries on digital trade. The intention was to introduce sweeping rules to facilitate removal of data flows, removal of prohibitions on data localisation and cloud computing among others. These negotiations on digital trade were never approved by World Trade Organization (WTO). India, along with South Africa and Indonesia, boycotted the Osaka Track. These emerging economies felt that Osaka Track would fundamentally undermine the core WTO principles for arriving at consensus-based decisions.Instead, a compromise text was put forward by India and South Africa. G20 leaders agreed on a Declaration on “Innovation: Digitization, Data Free Flow with Trust”. This ensured that the G20 would incorporate the demands of India and South Africa for “achieving an inclusive, sustainable, safe, trustworthy and innovative society through digitalisation and promoting the application of emerging technologies”. India and a large majority of developing countries insisted on inserting language on “critical role played by effective use of data, as an enabler of economic growth, development and social well-being”. The developing countries expressed their fears that they will be denied “policy space” for their digital-industrialisation through the proposed plurilateral agreement on digital trade. The strong stand taken by India and other developing nations ensured that in the final declaration of the summit, the approved language noted: “We affirm our support for the necessary reform of WTO to improve its functions”.
Another issue in focus was related to 5G technology, in the background of the demand by the US that countries ban Chinese telecom major Huawei’s 5G network. At the official media briefing, it was stated that India and the US would leverage “India’s capacity in technological development in start-up and design and Silicon Valley, and its role in developing 5G technology for mutual benefit”. After a bilateral discussion between Presidents Trump and Xi Jinping, a breakthrough appeared to have emerged on an imminent trade war between US and China, along with the easing of the US ban on Huawei. Whether it would lead to a final deal between US and China would be clear by the next G20 Summit. Meanwhile, a brief meeting was held on the sidelines of the summit between the US President Donald Trump and PM Modi. The post-meet briefing by the Indian foreign secretary Vijay Gokhale gave an impression that the Indian Prime Minister stood his ground. India didn’t commit to Trump administration’s call for a ban on Huawei’s plan to rollout 5G in the country. India said its decision will be taken considering the nation’s business and security interests.Suggesting that corruption be weeded out of society, the Indian delegation said, “fight against corruption should be done at all levels by all G20 countries by combating and ensuring that each G20 country has a law to enforce it”. The Osaka Declaration, thus incorporates India’s concerns on all major issues. It highlights that India’s new hyper-energetic diplomacy is resulting in an ever-greater global footprint for the country. This transition, apparent in Osaka, is not merely an expression of India’s greater self-assurance but also driven by an ambition to be a rule-maker, not merely a rule-taker. While India’s new confidence in taking a stand in international matters was first seen at the 2018 G20 summit held in Buenos Aires, in Argentina, this year, that position was strenghtened. The G20 Summit in 2022, to be hosted by India, will complete this transition and mark India’s emergence as an important global power.