News-Bulletin

G20 SUMMIT 2021 : CRUX AND RELEVANCE FOR INDIA

Italy hosted the 16th G20 summit in October 2021. The summit was the first meet of the leaders in two years and discussed several agendas which include Climate change, Covid pandemic, tax deal and global economy. 

Climate Change

The official statement of G20 noted, ” Keeping 1.5 degrees within reach will require meaningful and effective actions and commitment by all countries, taking into account different approaches” while expressing their commitment to the key goal of the Paris Agreement of limiting global warming to 1.5 degrees Celsius above pre-industrial level. The pledge to achieve net zero carbon emission was also discussed but no definite date was set. The leaders agreed to stop funding the new dirty coal plants abroad by the end of 2021. “Use of carbon pricing mechanisms and incetives” was acknowledged for the first time as a possible tool against climate change. The idea was similar to how IMF calls out the most polluting countries to set a minimum carbon price. 

Global minimum  tax

With the aim to establish a more stable and fairer international tax system, the G20 approved  the agreement that will subject the multinationals to a minimum 15% tax. The target was to keep a check on US internet giants like Google, Amazon, Facebook and Apple who evade taxes by basing themselves in low-tax countries. 

Vaccines:

The leaders decided to boost the supply of vaccines in developing countries and eliminating trade constraints in fulfillment of WHOs vow of vaccinating at least 40% of the world’s population against COVID 19 by 2021 and 70% by middle of 2022. Russian President Vladimir Putin complained about lack of international approval for Russia’s Sputnik V vaccine and the G20, in response, promised to “work together towards recognition of Covid 19 vaccines deemed safe and efficacious by WHO”. 

Global Economy: 

The Covid 19 pandemic caused several disruptions in the global economy which still needs to be addressed. Taking note of the rising inflation, spiking energy prices, and supply chain bottlenecks, G20 leaders noted, “We will continue to sustain the recovery, avoiding any premature withdrawal of support measures, while preserving financial stability and long-term fiscal sustainability and safeguarding against downside risks and negative spillovers” while doing away with national stimulus measures. They pledged to,” remain vigilant to the global challenges that are impacting our economies, such as disruptions in supply chains, (and) monitor and address these issues as our economies recover.”

Development Aid: 

From the $650bn made available by the IMF under its fresh issuance of Special Drawing Rights, G20 leaders decided to channelize $100bn towards the poorest nations. SDRs are not currencies but can be used as reserve currency or  converted to a stronger currency for investments, by the developing nations. 

Relevance for India: 

PM Narendra Modi described the summit as a “fruitful” one. India, with the participation in the G20 is establishing herself as an important player in the global supply chains, important contributor to the SDGs, and a representative of the developing world. India has been able to draw the global attention towards Doha Development Agenda, infrastructure, labor mobility and global action against terror financing, through G20. As a strong voice, India can ascertain the fulfillment and addressing of her needs and that of other developing nations by voicing the larger concerns in the agenda

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