India is about to host the most consequential international conference in its independent history. For the first time, leaders of the world’s major countries — representing almost 80% of the world’s economy and 60% of the global population — will convene in India for the G20 Summit. Counting regular attendees, invited guests, and members of the European Union (a G20 participant), the summit will represent 50 countries accounting for almost 90% of the global economy and 70% of the world’s population.
The G20 Summit comes at a particularly crucial moment for the country. India currently has the highest economic growth rates of any summit participant (5.9%), slightly ahead of guest Bangladesh (5.5%), China (5.2%), and Indonesia (5%), according to the latest International Monetary Fund estimates. Its post-pandemic economic recovery also reflected a certain prudence: Government debt increased by only 8% of gross domestic product (GDP) over the past four years compared to 22% in China, Japan, and the United Kingdom (UK). At the same time, the objectives of increasing employment, managing inflation, and reducing the current account deficit (of which India’s is the third largest among G20 countries, after the United States and the UK) remain priorities. The focus on boosting domestic manufacturing and exports (Atmanirbhar Bharat or self-reliant India) is intended to address these simultaneous challenges.
Demographics certainly help. This year, India’s population surpassed that of China. In fact, India now has the largest population of any country in human history, more than twice that of the British Empire at its peak. But India’s population growth is also rapidly decelerating. From this year, its largest demographic cohort will reach adulthood, presaging several decades of potential peak productivity before the onset of ageing.
The extent to which India can take full advantage of this dividend is unclear, and certainly not preordained, given the uncertain effects of technological change. Fully exploiting India’s favourable demographics requires sizable investments in human capital (including health and education), steady access to natural resources, quality physical and digital infrastructure, a favourable business environment, and access to international markets. If India is to attain skills, investment, technology, raw materials, and market access at speed, scale, and value, international partnerships are absolutely necessary.
Despite challenges, India’s economic profile contrasts favourably with the slower growth of the developed West, the political headwinds confronting China, and the volatility and weaker fundamentals of some other emerging economies. In addition to a large market and positive geopolitical factors, India’s relative stability, fiscal management, infrastructure spending, digital payments, science and engineering skills, and ongoing trade negotiations are perceived positively by foreign investors. Yet those same investors often express concerns about slow legal processes, Centre-state coordination, import duties, challenges in attracting and retaining talent, and unreliable local private sector partners.
Such economic, demographic, and commercial factors form the backdrop of India’s international outreach at the G20 Summit and beyond. Most significantly, India has moved to deepen its ties with the US and its allies in Europe and Asia, who collectively still constitute about 55% of the global economy and control much of the world’s leading technology. In recent years, India has made demonstrable strides in its economic, political, and technological outreach to the US, Quad, and the European Union.
India has also had to deal with a more adversarial China along their disputed border, in the Indian Ocean region, and on broader economic and institutional matters. This has required a combination of military balancing, economic de-risking, and diplomatic negotiations. But China has also risen as an unambiguous peer competitor of the US, widening the aperture for strategic convergence between New Delhi and Washington. Amid China’s tepid economic reopening, the US has consolidated strategic gains, including through Quad, the US-Japan-South Korea trilateral, and AUKUS.
Russia remains a wild card. New Delhi deems relations with Moscow vital for its defence, energy, and strategic needs, yet Russia’s invasion of Ukraine has exacerbated its conflict with the West and drawn it closer to Beijing. New Delhi has tried to diversify and balance economic relations with Moscow while pursuing deeper trade and technology relations with Europe. Seeking a diplomatic consensus on Ukraine at the G20 has proved more difficult given Moscow and Beijing’s recent intransigence. Closer home, India has sought to advance middle power partnerships, especially in West Asia. India’s decision to invite the United Arab Emirates (UAE), Oman, and Egypt to the G20 Summit is telling, as is the recent establishment of the I2U2 dialogue involving the US, Israel, and the UAE, and the incorporation of Saudi Arabia, Egypt, and the UAE into Brics. The Gulf remains an important bridge for meeting India’s trade, investment, energy, and human capital requirements.
Finally, India has sought to strengthen its leadership credentials in the Global South, starting in Africa, by attempting to address inadequate representation at international institutions; the challenges of food, energy, and environmental security; and the sustainable financing of physical, digital, and clean energy infrastructure. Advancing the Global South agenda may prove to be the Delhi Summit’s most enduring legacy but remains widely misunderstood. What appears to be a reversion to hoary notions of third-worldism is instead an outgrowth of competitive great power politics. India would be remiss in not taking the field.
Dhruva Jaishankar is executive director, ORF America. The views expressed are personal
