Since its inception in 1999, the core purpose of the Group of Twenty (G20) has been to provide a high-level international platform for the discussion of pertinent economic and financial issues. The group has long recognized the importance of collective action and inclusive collaboration among major developed countries and emerging economies to shape the global economic and governance order for a secure and sustainable future.
In close alignment, official engagement and dialogue between global business communities have been shaped by the Business 20 (B20) platform since 2010. Both these forums have delivered actionable policy recommendations based on priorities that concern addressing the most pressing socio-economic and environmental challenges for all regions collectively.
With India’s assumption of the G20 presidency in December 2022, ongoing geopolitical conflicts, the COVID-19 recovery, climate change and global economic stability all continue to be part of the major discourse for 2023. The G20 and B20 Summits that concluded this month provided major opportunities for India to mark the voice of the Global South, by leading dialogues on exploring effective solutions for these challenges and developing an action-oriented agenda to address important economic issues. India’s historical showcase of its influence on the global stage was supported by one of its most strategic partners – the European Union (EU), setting the stage for the development of a stronger partnership with the 27-member bloc.
The EU is the second largest trading partner for India, while India is the EU’s tenth largest. The EU is also a major source of foreign direct investment (FDI), with inflows from the EU to India valued at $101.26 Bn (April 2000 – December 2022). Outward direct investment (ODI) outflows to the EU from India were valued at $38.27 Bn (April 2000 – February 2023). EU companies have invested in key sectors of the country including manufacturing, technology, services and renewable energy, contributing to India's economic growth and job creation on a significant scale. With India’s G20 Presidency, the EU is well-positioned to support India on mutual priorities demanding immediate attention: green development, climate finance, women-led development, Lifestyle for Environment (LiFE), data for development, digital transformations and reform of multilateral institutions.
Among these, India and the EU are natural partners in supporting each other with their energy transition and sustainable growth. Both parties have prioritized sustainable development, climate change mitigation and renewable energy. The EU's expertise and technology in sustainable infrastructure development, transport regulatory frameworks, circular economy, environmental protection and digitalization will strongly support India's ongoing transition to a resource-efficient economy and increase global connectivity. Moreover, India's renewable energy opportunity is vast (as the third largest producer) and holds significant potential for transforming the global energy landscape, achieving energy security, mitigating climate change and fostering sustainable economic growth.
The country’s objectives to achieve 500 GW installed capacity from non-fossil fuel-based capacity and meet 50% of its electricity requirements from renewable energy sources by 2030 align with the broader mission of the European Green Deal. India’s co-leadership with France on the International Solar Alliance depicts the country’s commitment to partner with more EU countries and create opportunities for business, technological and policy-level collaborations on sustainability and climate-related initiatives.
Given the ongoing negotiations on a free trade agreement (FTA) between India and the EU, the G20 platform was an important avenue to promote concentrated discussions on trade and investment. The B20 has long been advocating for specific policies from an ‘ease of doing business’ point of view that promote bilateral trade and investment. With continuous discussions, these can lead to stronger support for free and fair trade, reduction in trade barriers, simplification of regulations, improving market access, facilitating mobility of skilled professionals and establishment of a rules-based international trading system. Along these lines, supporting the implementation of the recently announced India – Middle East – Europe Economic Corridor (IMEC) will be key in further enhancing the India-EU partnership. The ambitious plan to build an economic corridor linking these regions could speed up trade between India and Europe by 40% and boost digital connectivity across the region.
The B20 and G20 have also been working on developing common principles and standards for the digital economy, such as ensuring a level playing field for digital businesses, fostering cross-border data flows and enhancing digital skills and literacy. India and the EU have an opportunity to further leverage these platforms to develop a framework for collaboration on digital transformation and fintech. Both regions have significant expertise and potential in these areas. For instance, India’s command over fintech with the Unified Payments Interface (UPI) and RuPay is well known globally. Following Hon’ble Prime Minister Shri Narendra Modi’s state visit to Paris in July, France announced the adoption of UPI in recognition of the system’s unique potential for seamless and no-cost digital transactions. This paves the way for other EU members to similarly work with India in elevating their digital capabilities.
Finally, the G20 and B20 platforms provide the most appropriate ground for India and the EU to examine the current state of global governance and consider suitable reform of multilateral institutions. Such reform will ensure a voice is given to the developing world to contribute equally to shape the narrative of a future world. Together, India and the EU can leverage the strength of their strategic partnership and operationalise a dialogue for a reformed multilateralism. This form of leadership would serve as an example of bridging the North-South divide with two of the largest global powers uniting to forge a shared understanding of a renewed, inclusive and collective multilateralism for a changing world.