India is expected to become the 2nd largest economy by 2030 due to the limited health and economic impact of the Covid-19 surge, inflationary momentum from the Chinese economy, recessionary trends in major Advanced Economies, and stable domestic inflation. (Nageswaran, 2023). Furthermore, exports enabled economic recovery during the pandemic, outpacing other growth engines. Minister of Commerce and Industry, Piyush Goyal, even expected Indian exports to reach $1 trillion by 2030 (IBEF, 2022). Surpassing its own government’s prediction, the IMF even anticipated India’s economy to reach $4.7 trillion in 2024 and $5 trillion by 2026 (Kumtakar, 2022). In line with that, the World Bank expects India to grow at a rate of 6.6% in the fiscal year 2023–2024 (Dugal, 2023). That’s why, even when the global economic outlook is predicted to be bleak, the recession may not hit India hard. Apart from that, India also has another factor that “safeguards” it from this economic meltdown: Presidency of the G20 in 2023.
India’s G20 Presidency
During the Pravasi Bharatiya Divas Conference 2023, India’s Prime Minister Narendra Modi stated that India is looking forward to hosting the G20 Presidency as it is an opportunity for India to showcase their development potential and lead the way for a more sustainable future. As an output, India and other participating countries can together devise an approach to handle previously mentioned issues.
India highlights their digital economic advancement to help realize a socioeconomic transformation. Digitalization can facilitate Micro, Small, and Medium Enterprises to use e-commerce platforms in order to gain more benefits. Not only that, India would also be discussing the importance of greening global trade (G20 Secretariat, 2023). Pressing climate concerns surrounding this issue must also be balanced by recognizing the different paces at which countries are developing their economies. If India succeeds in implementing their policies and yields good results, it could serve as a model for other countries, especially in the developing world. India’s leadership would gain more trust from the international community, hence opening new opportunities to survive the upcoming economic meltdown.
Witnessing the impacts of last year’s G20 presidency on Indonesia, this writing takes on their experience as a benchmark to forecast the impact of the G20 presidency on India. First, the G20 presidency will provide India with a platform to show its leadership skills on a global stage, especially to manage and offer innovative solutions to various economic and political issues. Second, it will allow India to shape the global economic agenda and promote its interests, ensuring influence over important decisions that will impact the global economy’s future. Third, India’s presidency would deepen its engagement with other countries and strengthen its relationships with key partners, given that India has a growing economic and strategic importance in the region and the world (Tobing et al, 2022). Finally, it will give India an opportunity to promote its vision for a more inclusive and sustainable world (G20 Secretariat, 2023). This is particularly important given India’s commitment to sustainable development and its efforts to promote social and economic inclusion, allowing them to shape the summit surrounding sustainable development. However, to achieve desired impacts, India must work their way to make the best out of this opportunity.
Resilience Against Global Recessions
Considering the aforementioned projections, having the international community’s trust might spark further economic growth as India would be seen as a capable leader. Investors may be more convinced to invest, thus creating jobs that can progressively sustain India in recessions. Previous G20 presidencies show this pattern, where host countries attract foreign investors, thus increasing their economic activity, creating jobs, and ultimately boosting the country’s GDP. For instance, past G20 presidencies like Turkey, Argentina, China, and Japan had their domestic markets positively impacted. Compared to last year’s presidency, Indonesia managed to increase national GDP to Rp7.4 trillion due to its G20 presidency in 2022 (Pangastuti & Kristianus, 2022).
According to Indonesia’s Central Statistics Agency, Indonesia’s economy grew 5.2%-5.3% in 2022 (Kiryanto, 2022). It’s presumed that this may have an impact from Indonesia’s G20 presidency. Indonesia’s exposure through the G20 presidency helps promote local tourism, thus attracting more tourists after border restrictions were reduced. This stimulates growth for tourism areas that were previously paralyzed due to the pandemic. Gradually, it contributed to the increase of overall economic growth in Indonesia.
