G20 summit in New Delhi

The G20, which brings together the world’s main economies, held its leaders’ summit in New Delhi on 9 and 10 September 2023, under India’s presidency. On the first day participants approved a final declaration by consensus, an outcome that had been considered uncertain given the differences between the West, Russia and China over the war in Ukraine. Among the announcements were the admission of the African Union as a permanent member and a project for a new transport corridor between India, the Middle East and Europe.

It helps to understand what the G20 is and is not. It is not an institution with the power to impose rules, but a coordination forum whose conclusions guide the international economic agenda: trade, debt, finance, climate, energy. Its importance for business owners and families is indirect but real, because what is agreed —or not agreed— translates over time into rules, financing and the conditions of world trade.

A consensus text with absences

The declaration was approved with softer language on Ukraine than at the previous year’s summit in Bali: according to summaries, it calls for respect for international law and for refraining from the use of force to gain territory, but does not name Russia as responsible. Ukraine and several Western countries voiced dissatisfaction; for others, reaching a common text was already a result in itself. The presidents of China and Russia did not attend either, sending representatives.

The political message is twofold. On one hand, the G20 is still able to produce agreements in a climate of great tension; on the other, its geopolitical rift persists and limits what it can decide. For anyone operating in international markets, it is a reminder that trade and investment will remain exposed to blocs and sanctions, and that certain issues, such as trade with Russia, have no multilateral solution in sight.

Africa and the Global South

The admission of the African Union, which groups 55 countries, as a permanent member puts its position on a par with that of the European Union, the only other regional bloc with that status. Indian Prime Minister Narendra Modi announced the change when opening the summit and presented his country as a spokesperson for the so-called Global South, a diverse group of emerging and developing economies that demand more weight in international decisions.

For businesses, Africa and Southeast Asia are markets whose demographic and consumption growth potential is seen less and less as marginal. Having their institutions at the table in economic forums does not change business conditions overnight, but it points to an agenda more attentive to debt, development finance and market access.

A corridor and what to watch

Alongside the declaration, several countries announced on 9 September a project for a rail and shipping corridor that would connect India with the Middle East and Europe, with participation from India, the United States, Saudi Arabia and the European Union, among others. The project is presented as an alternative or complement to other trade routes and infrastructure initiatives, and its financing, route and timetable remain to be specified.

For Mediterranean ports and logistics operators, including Spanish ones, such a corridor could alter trade flows in the long run, but today it is above all a statement of intent. Companies whose supply chains are tied to Asia or the Middle East can use the moment to review their dependence on specific routes and single suppliers, and to follow the trade agreements that accompany these projects. This note is general information; consult your adviser for each case.

A summit does not change the world on its own, but it sets the direction of the conversation.

This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.