Trade and investment Ministers of the G-20 nations, representing 80% of the world economy’s output, three-quarters of trade flows and three-fifths of the population, concluded their deliberations under India’s presidency of the bloc last week. A comprehensive communiqué was scuttled as China and Russia blocked a reference to geopolitical issues arising from the conflict in Ukraine, as has been the case since last year’s G-20 Bali summit. Yet, amid flailing prospects for global trade and investment in the near-term, the G-20 nations did agree to take joint actions to reaffirm the world’s faith in cross-border commerce and investment flows as a route to prosperity and growth for all. The government counted five concrete and action-oriented deliverables from the meet, including a dialogue on global standards to bridge regulatory divergences across countries and a compendium on best practices for mutual recognition of qualifications for professional services such as medicine, law and nursing. Asserting that the trade track outcomes were the most significant so far in the G-20 parleys, Commerce and Industry Minister Piyush Goyal highlighted the other three deliverables as new elements that hold importance for India. A generic framework to map global value chains, essentially to identify the weakest links and mitigate any shocks like those seen during the pandemic, is a good idea that may prove tricky to execute. Digitalisation of trade documents to ease flow of goods and services is welcome, but the principles identified in the pact pertain to paperwork on transactions such as transport, insurance, and storage, “not necessarily” to government filings for cross-border trade.
What has been coined as the ‘Jaipur Call for Action to enhance Micro, Small and Medium Enterprises’ (MSMEs’) access to information’ may yield quicker and more tangible results. The International Trade Centre, WTO and UNCTAD, which operate the Global Trade Helpdesk, have been urged to work with G-20 members to upgrade their data portal for businesses and bridge the “information asymmetry” that often hinders small players. This resonates with Prime Minister Narendra Modi’s plea that G-20 Ministers strive to help MSMEs which account for 60%-70% of employment and 50% of the global GDP, integrate with global value chains as empowering them translates to societal empowerment. India, on its part, must also consider steps to bolster the capacity of its small enterprises. For one, its nudge for greenfield investments through productivity-linked incentives across sectors, can be tweaked to create a separate window for fresh outlays by MSMEs that cannot qualify for incentives based on larger investments. Moreover, bureaucratic red tape may have turned into a ‘red carpet’ for some large investors, but for smaller firms, getting a project off the ground is not easy yet.
