Leaders from the most powerful nations in the world will flock to New Delhi for the G20 Heads of State and Government Summit to be held on September 9-10. India’s presidency of the G20 forum, that represents 85% of global GDP and 75% of international trade, is hugely important as it comes at an inflection point, when a confident India Inc. is looking to flex its muscles globally. Watch this Business Today Visual Story to know what this presidency means for key sectors of India's economy.
According to experts the B20 Summit and G20 Summit is expected to translate into trade and investment opportunities for Indian businesses that will also help with global expansion. Besides, it could also give domestic industry a prominent seat at the table not just in international trade, but also in discussions on policy matters like trade agreements. It may also give Indian firms a bigger say in issues like climate change.
Nadir B. Godrej, Chairman & Managing Director of Godrej Industries, calls G20 “merely a stepping stone” for bigger benefits that will follow. "China+1 is only one part to it. As a country, a lot of work has been done on developmental R&D and we will now need to focus our attention on the fundamental part,” he told Business Today Magazine, adding that the digital stack has been a big breakthrough for India and one that can be taken to the rest of the world. “The G20 comes when India is at an interesting stage of development and better off than most countries, including China,” he added.
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For a long time, China has had a huge advantage in manufacturing at scale backed largely by low labour costs. "We can make a mark in knowledge-intensive manufacturing.” In an industry like chemicals, some manufacturing has moved to the US. “If we can build on that, what we don’t have by way of labour can be made up through our prowess in technology. This is also where PLIs will make a difference,” said Nadir B Godrej. In the near-to-long term, there will be an impact, profound in all likelihood, on various sectors.
Think oil and gas, and think green as it’s what large companies in the sector are working towards. This transition has been an important theme in discussions at the G20 summit, with the energy transition track laying emphasis on the switch away from fossil fuels. So, it is expected that the forum will give India’s green story a big fillip. “It allows larger countries with technology and capital to work with emerging markets like India. That means the transition to areas such as clean energy, with a helping hand, will take place in time,” said Jigar Shah, Head of Sustainability Research at Maybank Investment Banking Group.
As the world’s third-largest energy consumer, India aims to have 500 gigawatts (GW) of non-fossil fuel-based capacity by 2030. “G20 energy meetings foster discussions on global energy challenges and opportunities. Emphasising transnational green grids, we envision revolutionary changes in energy systems, successful achievement of climate goals, and millions of green jobs,” said Praveer Sinha, CEO & MD of integrated power company Tata Power.
At the ongoing G20 meetings during India’s presidency, the country has pitched itself as a hub for the manufacture of fast electric chargers, EV batteries and battery recycling. As per Sohinder Gill, Director General of the industry body Society of Manufacturers of Electric Vehicles (SMEV), G20 summit is all about reconfirming India’s determination. Jeetender Sharma, Founder & MD of Okinawa Autotech, said, “As the G20 shapes global policies, we see tremendous opportunities for the growth of the auto sector, allowing our country to demonstrate its strength to the world."
The metals sector feels that India can push the de-carbonisation and green steel agenda as the G20 President. “India can set aspirational goals with a focus on processes wherein policy intervention and R&D is required,” says Vipul Prasad, Founder and CEO of Magadh Capital Advisors. He adds, “There is a lot happening in the sector in terms of hydrogen-based output as a part of the industry’s attempts to lower its carbon footprint. The focus will be on green steel and one could see clear long-term goals.”
India’s infrastructure story is reflected in the growth of several sectors. With a total capacity of around 545 million tonnes per annum, cement is ready for the next phase. And the industry is hopeful that India’s G20 presidency will open up those opportunities. “We can attract foreign investment and collaborate on knowledge transfer,” says Mahendra Singhi, MD and CEO of Dalmia Cement Bharat. The long-term expectation is that reduced trade barriers can expand the market and help with climate change and sustainability.
In an industry that is still struggling elsewhere, India’s aviation sector has emerged as the brightest spot. “You look at the population we have, the economic growth, the geography, the diaspora; and the opportunity to support a much larger fleet is absolutely obvious,” Campbell Wilson, CEO of Air India, told Business Today. With India expected to become the world’s third-largest economy by 2027, the aviation sector would benefit immensely.
Vinay Malhotra, Head of Global Sales at India’s largest carrier IndiGo, calls it an ‘immense’ yet ‘untapped potential’. “Currently, the percentage of Indian consumers flying, both domestically and internationally, remains relatively low, signifying ample room for market development. The G20 presidency provides a crucial opportunity to leverage this potential, further accelerating the growth of the aviation sector in India," he said. The G20 often addresses financial regulations and international trade policies that can indirectly affect the sector.
The real estate sector is betting big on India’s G20 presidency for two reasons: one, it feels that visiting foreign investors and non-resident Indians’ (NRI) interest will be piqued; two, it expects the uptrend in economic activity to benefit. Nayan Raheja, Director of realty major Raheja Developers, says the forum has enhanced the visibility of cities where meetings are being held. He adds, “As it highlights India’s potential, the summit will propel foreign and NRI investment.”
India currently has over 400 private space companies, including 150 start-ups. A space market that’s worth $8 billion and is growing at a CAGR of 4%, compared to 2% globally. In a G20 Space Economy Leaders Meeting held in July, several non-space faring countries realised for the first time the substantial ground covered by India. “We are seeing that investor interest both within and outside India for investing in the Indian space start-ups has gone up dramatically,” says Pawan Goenka, Chairperson of Indian National Space Promotion and Authorisation Centre.