‘People, Planet, Prosperity’ are three pillars of this year’s G20 agenda that resonate, more than any other thematic topic of discussion, with the current thinking around trade and investment. The massive collapse in global trade and investment flows during the prolonged wave of the coronavirus pandemic in 2020 was unprecedented. Foreign direct investment (FDI) worldwide fell 35% from $ 1.5 Tn in 2019 to a $ 1 Tn1 in 2020, urging countries across the world to refocus their attention to building a resilient, inclusive, and sustainable global economy on the path to post-pandemic recovery. The G20 Trade and Investment Ministerial Meeting, held on 12 October 2021 in Sorrento, concluded with precisely the recognition that a future-ready economy is founded on the basis of a rules-based, non-discriminatory and transparent multilateral trading system which works to ensure prosperity for the people of this planet2. An extensively engaging year of deliberations within this uniquely challenging context, with Italy leading the framework as G20 President, culminated in the G20 Summit on 30-31 October 2021 in Rome.
India’s FDI figures reveal a remarkably positive upswing when viewed in contrast to comparable world figures. Total FDI inflows amounted to $ 64 Bn in 2020, a 27% increase from $ 51 Bn in 2019, making the country the fifth largest FDI recipient in the world3. Foreign investment in India has been boosted, along with the robustly growing appeal of the information and communications technology (ICT) sector, also by the country’s fierce commitment to develop its trading and investment environment through coordinated action and joint partnerships. These tenets form the core of the G20 Rome Leaders’ Declaration adopted at the end of the G20 Summit, which pledges to act upon specific points of action agreed through consensus in areas including healthcare, innovation and technology, environmental sustainability, trade and investment, and support to vulnerable countries for ensuring a level playing field. Over the duration of 2020-21, India has brought to the table a host of policy changes and taken concrete initiatives that have, going forward, set a solid foundation for the country to jointly support other world leaders in accomplishing the goals of the Sorrento Declaration.
The importance of developing a robust public health system to support future trade and investments has been brought to the forefront amidst the global pandemic. India has particularly been a champion in the healthcare space, with the number of coronavirus vaccine doses administered reaching a landmark threshold of 1 Bn on 21 October 2021, making it the second country in the world after China to achieve this mark4. This tremendous feat in the fight against the global pandemic has been aided by the allocation of INR 35,000 crores (around $ 4.7 Bn) as part of the Union Budget 2021-22 towards the development and manufacturing of vaccines, leading to a whopping 137% increase in the total budget outlay for healthcare in FY 2021-22 compared with the previous year5. Equitable, timely, affordable, and cross-regional access to emergency medical products and services forms an essential backbone of a strong business operating environment. The recently launched Production Linked Incentive (PLI) Scheme for Promotion of Domestic Manufacturing of Medical Devices6 is another testament to India’s efforts at guaranteeing a level playing field for domestic manufacturers of medical equipment and further boosting domestic manufacturing for critical future supplies across the world. Prime Minister Narendra Modi’s pledge during the G20 Summit to make India ready to produce 5 Mn vaccine doses by the end of 20227 shows India’s unwavering commitment to work with G20 leaders to address the inequity in access and distribution of vital healthcare goods. Equipped with essential industry resources and competent health professionals, India’s capacity to contribute to international public health efforts and creating resilient industry supply chains is all the more heightened and proven to yield enormous gains.
Another G20 priority revolves around utilizing the enormous potential of technology as a major conduit through which a post-pandemic recovery can emerge. The Union Budget 2021-22, for the first time, comprises a pillar specific to innovation and research and development (R&D)8. While recognizing the existence of a persistent digital divide across nations of varying income levels, the ability of various pockets of India’s economy to continue functioning highlights the encouraging impact that the development of digitalization can have, particularly in building resilience against future shocks. India’s population is already on its way to get ready for a digital transformation. Between June 2020 and June 2021, digital transactions based on Unified Payments Interface (UPI) increased by 110% in volume and 109% in value9, indicating consumer ease and preference for digital payments. The ever-growing market of digital consumers in India provides the country with an unparalleled competitive edge in harnessing technology to facilitate the operations of entrepreneurs and businesses, whether big or small. The National Single Window System, launched in September 202110, capitalizes on this digital boom to provide for unified and integrated business procedures for foreign companies investing in India. The country’s latest initiatives to build a robust digital ecosystem supported by skilled human capital directly coincides with the long-term G20 objective of building a more inclusive and accessible digital economy that constantly innovates to find new solutions to evolving challenges in our world today.
During the past year in the lead up to the main G20 Summit of 2021, India participated in crucial consultations and achieved defining successes along with the leaders of today’s major economies. Clear-cut objectives were outlined, languages for actionable points were refined, and stronger commitments were made to engage in purposeful multilateral action. India, in particular, proposed large-scale and ambitious plans for its own development, making it clear that the steps taken henceforth on the path to economic recovery will require a new lens through which joint partnerships and collaborations are viewed with peer countries in the G20. Multilateralism has indeed taken on a new meaning in today’s uniquely challenging and demanding world, and there is new hope that the goals defined resolutely on one of the largest global platforms will seek to truly benefit every citizen.
This article has been authored by Ranjana Prasad.
- UNCTAD World Investment Report 2021
- UNCTAD World Investment Report 2021