India's global standing with a focus on BRICS and G20

As we conclude the year, we look at events that hold the promise of shaping the destiny of our nation in the years to come. India’s G20 presidency was one of the most talked about events this year.

Established in 1999 after the Asian financial crisis, the G20 has become a crucial hub for global economic collaboration. According to S & P, India is the world's fastest-growing major economy and is expected to become the world's third-largest economy by 2030. India hosted the 18th G20 Summit with the theme of "Vasudhaiva Kutumbakam," or "One Earth, One Family, One Future," underscoring India's commitment to multilateralism. Collectively, the G20 member states account for 85% of the global GDP, 75% of international trade, and two-thirds of the world’s population. The global economic slowdown, climate change, and geopolitical tensions stand as the foremost challenges of the time, sparking critical discussions across various sectors.

Dhruv Research conducted a survey to gauge the perception of Indians on the G20, 79.3% of respondents expressed confidence in their effectiveness in addressing global challenges whereas 10% of respondents did not feel the same, while the remaining respondents were uncertain about the impact.

In the last two decades, the G20 countries have accounted for 80% of global trade. Trade flows have increased significantly since the G20's inception, but have slowed in recent years. The G20 attracts around 80% of global foreign direct investment (FDI). FDI flows have also slowed in recent years, but are expected to rebound in the coming years.

Our survey indicates that Indians believe that hosting the G20 summit in India could yield significant positive impacts, notably enhancing trade and investment prospects by 23.0%, and providing valuable opportunities to showcase Indian culture and heritage, reflecting 20.6% in the survey responses.

Source: Online Survey of 1100+ Indians in Sep 2023

The BRICS countries account for approximately 40% of the global population and 25% of global GDP. Prime Minister, Narendra Modi, conveyed that India will achieve the target of 40% energy capacity from non-fossil sources 9 years ahead of schedule. The goal of 10% ethanol-blending in petrol has been achieved 5 months earlier than expected. India boasts the world's first fully solar-power-operated airport, and the country's extensive railway system is set to become net zero in this decade. (Source: PM’s Speech at G7 Summit in Germany)

As per the survey conducted by Dhruv Research Indians believe that the BRICS summit holds the potential to significantly benefit India through increased economic growth and trade opportunities at 26.3%, along with strengthened security and defense collaboration, accounting for 20.4%. Overall, the summit offers a multifaceted platform fostering economic, diplomatic, and cultural exchanges, addressing global challenges collaboratively.

Source: Online Survey of 1100+ Indians in Sep 2023

BRICS countries have a significant role to play in addressing the challenges of the 21st century as India is a key member of the BRICS grouping. It is well-positioned to play a leading role in the BRICS' efforts to address the challenges. China had the largest GDP among the BRICS countries, at 16.86 trillion U.S. dollars in 2021, while India, Russia and Brazil were all below three trillion. Combined, the BRICS bloc had a GDP of over 26.03 trillion U.S. dollars in 2022. Fast-forward to 2023, the collective GDP of BRICS 2023 is over $25 trillion, surpassing the GDP of the G7 countries. This shift reflects the ongoing ascent of BRICS in the global economic landscape.

*New additions to BRICS that will join the bloc on January 2024
Source: IMF

BRICS Countries	2023 GDP (USD billions)	Share of Global GDP
China	$19,374	18%
India	$3,737	4%
Brazil	$2,081	2%
Russia	$2,063	2%
South Africa	$399	0.40%
Saudi Arabia*	$1,062	1%
Argentina*	$641	0.60%
UAE*	$499	0.50%
Egypt*	$387	0.40%
Iran*	$368	0.40%
Ethiopia*	$156	0.20%
BRICS Total	$30,767	0.29

The BRICS countries have seen a rise in their global GDP share, while conversely, the G7 nations have experienced a decline from 45.8% in 1992 to 30.3% in 2022. Goldman Sachs forecasts indicate that by 2050, BRICS will have overtaken the G7 in terms of GDP, even without its newly added members.

India is emerging as a formidable force on the global stage, assuming a progressively pivotal role in both the global economy and international affairs. India is well-positioned to continue to grow in influence in the years to come. It is imperative for India to maintain its leadership role in crucial multilateral forums like the BRICS and the G20.

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References

• https://economictimes.indiatimes.com/news/economy/indicators/india-set-to-become-3rd-largest-economy-by-2030-sp/articleshow/105745906.cms
• https://www.imf.org/en/News/Seminars/Conferences/g20-data-gaps-initiative
• https://brics2021.gov.in/about-brics
• https://www.visualcapitalist.com/charted-comparing-the-gdp-of-brics-and-the-g7-countries/#google_vignette