Day 60 – Q 3. What is G-20? What is its mandate? How does it affect India’s economic interests? Discuss.

  • IASbaba
  • August 18, 2020
  • 0
GS 2, International Relations, TLP-UPSC Mains Answer Writing
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3. What is G-20? What is its mandate? How does it affect India’s economic interests? Discuss.  

जी -20 क्या है? इसका जनादेश क्या है? यह भारत के आर्थिक हितों को कैसे प्रभावित करता है? चर्चा करें।

Demand of the question:

It’s a straightforward question as it demands candidates to write about the G-20 and its mandate. It also expects candidates to write about the impact of G-20 on India’s economic interests.


The G20 is an informal group of 19 countries and the European Union, with representatives of the International Monetary Fund and the World Bank. The G20 membership comprises a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, 80% of global investment and over 75% of global trade.


Formed in 1999, the G-20 has a mandate to promote global economic growth, international trade, and regulation of financial markets. Because the G-20 is a forum, not a legislative body, its agreements and decisions have no legal impact, but they do influence countries’ policies and global cooperation.

  • After its inaugural leaders’ summit in 2008, the leaders of the G-20 announced that the group would replace the G-8 as the main economic council of nations.
  • The G-20 is a leading forum for global financial issues whose members include major developed and developing economies.
  • Although not a legislative body, its discussions help shape financial policy within each of its member countries.
  • Recent agenda items at G-20 meetings have included crypto currency, food security, and trade wars.

G-20’s effect on India’s economic interest:

  • India has been a founding member of G20 process and has played an active role in proposing new ideas and finding solutions.
  • India will be hosting the summit in 2022 when India completes 75 years of independence. So it is going to be an important landmark event for the country.
  • Though G-20 as a forum discusses varieties of issues, major issues which are discussed by G-20 which affect India’s economic interest are terrorism, Economic offenders, taxation, and new digital technologies.
  • Economic offenders: Dealing with the economic offenders has been emphasized by India as a serious policy challenge for India and other countries in G20.
  • Economic offenders often commit the crime in one country and flee to another to escape the legal process at home. In this context, India proposed this idea and sought cooperation from other G20 countries.
  • Taxation: Global taxation is another issue for G20 to deal with. G20 has already taken cognizance of this fact and has come up with the Base Erosion and Profit Sharing (BEPS) framework.
  • The complications arise from the spread of global supply chains as activity happens at different levels and at different places. 
  • Very often, it is difficult to assess the origin of a particular activity for tax, like when and how to tax the entities engaged in tax evasion. Hence, these kind of framework help Indian economy to formulate policies in such a way that tax evasion can be curtailed.
  • E-commerce mostly involves transactions without adequate information about the place of these transactions. G-20 like body if looks in to it then it becomes a major tool to avoid tax evasion on the world scale. For instance, Panama paper leak.
  • The Fourth Industrial Revolution is going to be driven by those digital technologies like artificial intelligence, internet of things, block chain, etc.
  • Although the benefits of digital technologies for economic growth and social development are well-known, there are certain issues such as privacy, data security and digital governance which are to be properly understood.
  • For instance, artificial intelligence involves a lot of ethical issues which need to be tackled properly with international cooperation. Here G-20 impact India’s economic interest by facilitating discussion on the world forum and it also facilitates to formulate draft framework to govern emerging technologies on world economic scale.
  • Terrorism: To contain terrorism requires global action, particularly regarding the money that flows into terrorist network from different parts of the world. G20 has provided platform to discuss this issue on international table. 


The world is so interconnected and integrated now that countries have to work together to resolve all global issues. Growing economic interdependence and spread of global supply chain are a reality rather than hype. Hence, G20 can provide the vision to bind all the countries especially the emerging markets like India, to support coordinated actions on major global economic issues and emerge strong on economic terms.


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