G20 host India taps soft power as it champions new world order

INDIA is set to use this week’s meeting of finance ministers and central bank governors from the Group of 20 (G20) nations to try to amplify its influence over developing economies in Asia, Africa and Latin America. Without the cash to dole out billions in loans like China did under President Xi Jinping’s Belt-and-Road Initiative, India is seeking to use soft power by championing issues important to struggling nations such as debt relief. That is one issue that may emerge as a key theme at the meetings in Bengaluru, which start on Friday (Feb 24). While China is the obvious rival, India does not want to be constrained by the US and its allies either. It will stick up for its own interests on matters such as energy security. For Prime Minister Narendra Modi, this year’s hosting of the G20 is an opportunity to leverage India’s growing strategic and economic heft. India’s geopolitical importance to the US and its allies has grown, as American policymakers seek to thwart Beijing’s rise, with an increased focus on the Quad grouping that also includes Japan and Australia. Already the world’s most-populous nation according to some estimates, India is one of the fastest-expanding economies at a time of sluggish growth around the globe, luring companies like Apple to expand there. Even before kicking off key G20 gatherings, New Delhi organised a virtual Global South summit in mid-January, where Modi said: “As far as India is concerned, your voice is India’s voice. Your priorities are India’s priorities.” Nirmala Sitharaman, in an address to fellow finance ministers from across 14 economies as far-flung as Belize and Sierra Leone during that summit, said that as G20 host, India would seek to “rebuild trust in multilateralism” and greater inclusion of struggling nations in discussions. Reforming multilateral institutions, assistance for low and middle-income countries on debt vulnerability, and climate initiatives are among India’s priorities, said its chief economic adviser V Anantha Nageswaran. As poorer nations face debt distress, India is pushing that conversation into the mainstream. G20 sherpa, Amitabh Kant, last week publicly pressured China to be more transparent on its loans to low-income countries and to take some losses. India’s self-nomination as the leader of the Global South is the culmination of messaging on the global stage that it will not simply play by the rules and norms of more powerful nations. The government crackdown on BBC that met no resounding reprimand from the US and allies shows Modi’s success at leveraging his nation’s rising importance. India’s resistance to some Western ideas extended to a more combative attitude towards criticism from foreign investors. After billionaire George Soros said Modi would “have to answer questions” about his relationship with tycoon Gautam Adani, the government went on the offensive. Smriti Irani, a minister in Modi’s cabinet, described Soros’ remarks as an attempt to destroy Indian democracy, a response similar to Adani’s characterisation of US-based short-seller Hindenburg Research’s allegations against the group as an “attack on India”. India’s oil minister expressed the country’s stance clearly in a recent interview when asked about New Delhi shunning Western sanctions on Russia following its invasion of Ukraine. “Energy is not about altruism or philanthropy,” Hardeep Singh Puri said on the sidelines of the G20 Energy Week meetings in Bengaluru. India’s campaign has already garnered allies – some natural, some unlikely. Indonesia signalled a strong backing of India’s leadership on the global stage as it passed the torch of the G20 presidency this year. Finance Minister Sri Mulyani Indrawati counted the two nations as “among a few big emerging countries who are performing very well on the economy”, adding that they thus have “more gravitas, more influence and more respect globally”. While the US has been at odds with India around issues like the sanctions on Russia, officials in Washington are warmer towards New Delhi’s call for the need to revamp multilateral institutions. US Treasury Secretary Janet Yellen gave a speech in Washington earlier this month that called for a World Bank overhaul, including a push for the lender to be more aggressive in extending its balance sheet and recruiting more private-sector capital. The US was coordinating closely with India on its pursuit of multilateral development bank “evolution” as a key priority during the G20, said Yellen. To be sure, there is healthy scepticism that India’s efforts will translate into real change in the global order anytime soon. India’s big challenge will be securing any sort of consensus at the G20 meetings, which have long been panned for producing little more than watered-down agreements on broad issues. Last year, it failed multiple times to achieve a consensus that would constitute a final communique at the close of the gathering. Regardless of whether India’s time has come, the world cannot afford to ignore the South Asian giant. Japan is considering inviting India to a Group of Seven summit in May to discuss issues including the war in Ukraine, nuclear disarmament and climate change. “People of the Global South should no longer be excluded from the fruits of developments,” Modi said at the January summit. BLOOMBERG