India, as the current president of the G20 group of nations, is trying to find a common ground on some of the most contentious issues in the global arena, such as crypto regulation and climate change. The country has shown a willingness to step back from its previous positions and accommodate the views of other stakeholders, even if that means compromising on some of its own interests.
India Seeks Global Framework on Crypto Regulation
One of the key issues that India has taken up during its G20 presidency is the regulation of crypto-assets, which are digital tokens that can be used as a medium of exchange or store of value. Crypto-assets have been growing in popularity and adoption around the world, but they also pose challenges for financial stability, consumer protection, taxation, and anti-money laundering.
India has been ambivalent about crypto-assets in the past, with its central bank banning banks from dealing with them in 2018, only to be overturned by the Supreme Court in 2020. The government has also proposed a bill that would ban all private cryptocurrencies and create a digital rupee, but it has not been tabled in the parliament yet.
However, as part of its G20 presidency, India has requested the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to prepare a policy paper on crypto regulation, which was released on Thursday. The paper recommended against an outright ban on crypto-assets and suggested introducing a licensing regime for crypto-asset platforms, bringing them under the fold of anti-money laundering and counter-terrorist financing standards.
The paper also called for international cooperation and coordination on crypto regulation, as crypto-assets are borderless in nature and can pose cross-border risks. India’s endorsement of the paper shows how far its key regulators have moved from their earlier stance and how they are willing to work with other countries to find a global solution.
India Yields on Climate Transition
Another issue that India has faced during its G20 presidency is climate change, which is one of the top priorities for many developed countries. India is one of the largest emitters of greenhouse gases in the world, but it is also one of the most vulnerable to the impacts of climate change, such as rising temperatures, extreme weather events, and sea level rise.
India has argued that it needs more time and resources to transition to a low-carbon economy, as it still has to meet the development needs of its large population. It has also demanded that developed countries fulfill their commitments to provide financial and technological support to developing countries for climate action.
However, India has also shown some flexibility on climate issues, as it recognizes the urgency and importance of tackling global warming. For instance, India has agreed to phase out inefficient fossil fuel subsidies by 2025, which was one of the demands of the G20 finance ministers. India has also supported the creation of a common framework for measuring and reporting climate-related financial risks, which was proposed by the FSB.
India has also indicated that it may revise its nationally determined contributions (NDCs) under the Paris Agreement, which are the voluntary pledges made by each country to reduce their emissions and adapt to climate change. India’s current NDCs include reducing its emissions intensity by 33-35% by 2030 from 2005 levels, achieving 40% of its electricity generation from non-fossil sources by 2030, and creating an additional carbon sink of 2.5-3 billion tonnes by 2030 through forestation.
India may announce its updated NDCs at the upcoming COP26 summit in Glasgow in November, where world leaders are expected to raise their ambition and action on climate change. India may also announce its long-term vision for achieving net-zero emissions by mid-century, which is another expectation from the G20 countries.
India Faces Challenges in Building Consensus
While India has tried to balance its own interests with those of other countries on crypto and climate issues, it has faced challenges in building consensus among the G20 members on other matters. For instance, India has not been able to issue a joint communique after several meetings on various topics, mainly due to objections from Russia and China over the inclusion of two paragraphs that call for the former to de-escalate and withdraw from Ukraine.
India has also faced resistance from some countries on its proposal to create a new multilateral development bank (MDB) that would leverage capital from existing MDBs and provide concessional financing for infrastructure projects in developing countries. India has argued that this would help bridge the huge infrastructure gap in emerging economies and boost their growth potential. However, some countries have expressed concerns about the governance and accountability of such a new institution.
India’s G20 presidency will culminate in a summit in New Delhi in October, where Prime Minister Narendra Modi will host the leaders of the world’s major economies. India will hope to achieve some concrete outcomes and agreements on the various issues that it has raised during its tenure. India will also hope to showcase its leadership and vision for a more inclusive and sustainable global order.