G20 Summit 2023: What does India’s Presidency Mean for your Finances?

National and International events like sports matches and the Olympics never fail to bring out the patriotism inside us. Every Indian citizen gets ready with a powered-up spirit to support the nation with vigour. The forums formed for carrying out prominent motives like global economies also attract people’s attention.

One such event in New Delhi this last weekend had all of India buzzing with excitement. The G20 Summit is being hosted (1st December, 2022 to 30th November, 2023) by India this year!

On December 1st, 2022, Indonesia handed India’s Prime Minister Narendra Modi the gavel of G20 Summit leadership. And now, in September 2023, India hosted the prestigious event. 30 heads of state, 14 heads of international organisations and top European Union officials from 21 countries participated in the Summit. Topics like climate change, poverty, equality, and world peace were discussed, and ties were formed at this Summit.

The meet started with a paramount announcement. One more member joined the group of 20 countries, raising the count to 21. The African Union accepted the PM's invitation and took his seat at the G20 circle for the first time.

So, should we start calling it G21 instead of G20? 🤔

All in all, let me take you on a quick roundabout of how this meet turned out to be a life-changing event for you. Yes, the G20 Summit is not necessarily a political event. The topics discussed and agreements aligned affect several sectors of the finance world.

So, let’s begin dissecting the summit with…     

What is G20 and What Does it Represent?

Group of 20, commonly known as the G20, is an intergovernmental forum. It has 19 sovereign countries, the European Union, and the African Union. G20 was formed in 1999 and is convened at least once a year by one of the members. The countries involved account for 85% of the world’s GDP, 75% of the global trade, and 2/3rd of the world’s population. 

The G20 Summit is the primary event for addressing the global financial crisis. The theme for this year’s Summit hosted by India was “Vasudhaiva Kutumbakam,” meaning “One Earth, One Family, One Future”. India also passed on the baton of the G20 presidency to Brazil on this occasion, along with major discussions.  

Preparations were cross-checked, and events well planned, as G20 Summit meetings are going to be held in 60+ cities like Varanasi, Raipur, and more, after New Delhi.

Now that you know what the Summit represents, let’s jump on to the topic at hand.

Discussions that Can Affect your Investments

Based on the topics to be discussed at the G20 Summit and the decisions reached, your finances can be highly influenced. So, let’s see which are the agreements you should keep an eye on:

Economy Corridor:

For a smooth transition of trade between countries, an economic corridor between India-Middle East-Europe was discussed. A Memorandum of Understanding (MoU) was signed between India, UAE, USA, Saudi Arabia, France, Germany, Italy and the European Union, giving a green light to this agreement.

With this “game-changing” agreement, as were the words of US President Joe Biden, trade between India, the Middle East and Europe would be profoundly boosted. Rail and shipping sectors would benefit from this agreement, and thus, they can present a good investment opportunity. Spice route will also be redeveloped based on the best possible regions for enhancing the global economy.  

To benefit from the upcoming opportunity, you should be aware of the rail industry. Check out this article on RVNL and learn how to cash in for good times ahead.

Climate Change:

I know what you are thinking. "What's the climate got to do with my investments, right?" Hold your horses, folks, because the world's climate can shadow your investments like thunderclouds.

We are all well aware of the increasing global warming and climate change. The onslaught of heat waves and extended seasons with abrupt rainfall showers has worked to wake humans from their ignorance. Now, industries worldwide are looking to find alternative energy sources to help heal Mother Nature. Green Energy is the first and most popular industry which most conglomerates are focusing on.

Apart from this, UK's Prime Minister Rishi Sunak also announced that Britain would donate $2 billion to the Green Climate Fund (GCF). This fund focuses on giving aid and support to developing countries in dealing with climate change.

This announcement opens opportunities for investments in renewable energy companies. The government is also bringing forward various schemes to boost green energy developments in the world. So, it can prove to be a promising investment sector for retail investors.  

Financial Regulation:

Promoting and improving financial regulation was one of the main agendas of the 18th G20 Summit. Every organisation should have rules, laws, and guidelines for accurate operations. A system without regulations is prone to disaster.

The Sherpas headed the discussion on this topic from different nations. The name "sherpa" derives from a Nepalese ethnic group who served as guides and porters of the Himalayas. It portrays an individual with the responsibility to guide the summit or meetings towards a conclusive outcome.

India's G20 Sherpa Amitabh Kant lays out the focus areas of New Delhi G20 declaration:

1. Strong, Sustainable, Balanced, and Inclusive Growth
2. Accelerating Progress on Sustainable Development Goals
3. Green Development Pact for a Sustainable Future
4. Multilateral Institutions for the 21st Century
5. Reinvigorating Multilateralism

Apart from this, cyber security, AI governance, and advancements in financial regulation were also discussed. A Crypto Asset Reporting Framework (CARF) is in development to regulate the new sector. A framework for human-centric AI governance was also brought forward, which was adopted with consensus.

The strengthening of the regulatory bodies and additions of new frameworks is bound to affect the related industries. Acceptance of 28% GST on online gaming is a fresh example. So, it's time investors start keeping an eye on AI-centric companies for any changes from the government's end, especially if you are invested in companies like Delta Corp Ltd.

Click here to learn how the 28% GST application is affecting the online gaming industry.

The Bottom Line

G20 Summit 2023 became the first ever summit to reach a consensus unanimously on several topics. It also recorded the highest number of attendance from nations and organisations. Overall, the event was a success.

It would be interesting to see what the rest of the meetups in various cities would bring until the end of November 2023.

*Disclaimer: The stocks and companies discussed above aren't a recommendation from Insider by Finology and shall not be construed as a replacement for professional advice. Consult a professional or conduct the necessary research before making investment decisions.