How Can G20 Presidency Promote Global Supply-Chain Network

Recently, India assumed the presidency of G20 grouping and has resolved to address important aspects like security and supply chain resilience. Even during the last G20 meeting in Bali, PM Modi emphasized on focusing on global supply chain solutions to improve trade and commerce among member nations.

With India being at the helm, the onus is on us to see through that the G20 bloc develops some important global consensus on issues like supply chain networks.

What is G20?

The G20, or Group of Twenty, is an intergovernmental forum of the world’s 20 major developed and developing economies, making it the premier forum for international economic cooperation. It is important that the bloc focuses on immediate and future crises to stay relevant, rather than ending up being just another grouping without any major influence.

How can G20 help build resilient supply chain solutions?

G20 has some of the important economies of the world as members and it has a real chance at influencing global policies to ensure a better business environment and developing resilient and secure global supply chains.

The fragility of supply-chain is out in the open. The economic turmoil caused by the pandemic disruptions and the shrinking demand because of recession across the world, has made it essential for global economies to strengthen and reimagine their supply chain solutions.

To achieve greater consensus, India needs to align its plan with the long-term aim of the member nations. India’s G20 leadership can help focus on alignment of policies, promote regional and multi-lateral cooperation, and promote sustainable development.

Policy Alignment

As a G20 president, India can help develop policies that ensure supply chains are resilient even in the face of disruptions. This can be achieved by ensuring security and building partnerships.

Global value chains and digital trade have been a focus of G20 for the past five years. Encouraging member nations to develop policies that ensure strong value chains through infrastructure investment and greater supply chain connectivity should be India’s focus to achieve supply chain resilience through the policy route.

At the policy stage, both states and businesses need to work closely to evaluate the factors that are important for supply chain success. Identifying vulnerable areas and ensuring focused investments will help build trust. India recently unveiled a lot of initiatives like Sagarmala, Gati Shakti, network of expressways and high speed rails to support the internal supply chain. Developing inward and outward facing regulations that promote ease of business and build supply chain resilience will facilitate business certainty and increase opportunities to foster global businesses.

Apart from facilities, there needs to be a greater co-operation and partnerships to tackle any security threat that might undermine supply chain and business success. Today, the threat is not just the visible one like war but invisible threats like terrorism, cyber attacks, pandemics and natural calamities too need to be accounted for.

Multi-lateral cooperation

As countries look to rebuild economies and focus on trade recovery, there has been an emergence of regional cluster based supply chains like IPEF and SCRI. While these are focused on reducing the reliance on an individual state, it will be India’s responsibility to maintain a fine balance and avoid protectionism at all costs.

As a president of G20, India will play a critical role in establishing a framework for the supply chain. We can also expect India to play a role in supply chain diplomacy to help set common principles for supply chain design and management across all G20 member nations.

India has consistently pushed for strong and seamless supply chain networks across various regional groupings. With G20 presidency, it will be important to see how India pushes for supply chain resilience measures and gets a consensus across member nations. With the recent show of leadership, where the world echoed India’s take on Russia- Ukraine war, we can be hopeful for some concrete measures in building supply chain resilience over the next one year.

Promote sustainable development

Achieving net zero targets are more important than ever for the nations around the world. India in its capacity as a president of G20 would be expected to promote sustainability in supply chains. Achieving consensus, developing frameworks and common agreements that focus on digital trade, paperless documentations and making supply chains energy efficient will be a priority for India.

This is a great opportunity for India to exhibit ‘soft power’ to shape the global policy agenda. As a freight forwarder, we hope that the coming year is the year of supply chain growth and resilience because building back economies, begins with strengthened supply chains.