What is G20 Summit? How Does It Affect the Indian Stock Market and The Economy?

The G20 Summit is officially known as the “Summit of the Financial Markets and the World Economy”. The G20 participants include 19 leading countries and European Union (EU). The G20 Members are India, the United States of America, the United Kingdom, Saudi Arabia, Turkey, Russia, the Republic of South Africa, Mexico, Japan, the Republic of Korea, Italy, Indonesia, Germany, France, Canada, China, Australia, Argentina, and Brazil.

The Premier forum for International Cooperation represents 80 percent of the global GDP. The G20 makes continuous contributions towards accomplishing robust global economic growth. The 17th G20 Summit was held in October 2022 in Bali, Indonesia. The 18th G20 Summit is scheduled to be held in September 2023 at New Delhi’s Pragati Maidan in India.

The purpose of the G20 Summit is to systematically bring together the world’s most significant industrialized and developing economies to discuss key issues of the global economy. The primary objectives of the G20 Summit include the following:

• Policy Coordination between the G20 members to achieve global sustainable growth and economic stability.
• Promotion of financial regulations for reducing risks and prevention of future financial crises.
• Creation of new international financial architecture.

On December 1, India assumed the G20 Summit 2023 presidency. However, It isn’t the most propitious time to take up the role. While an economic slowdown is expected, Growing US-China tensions are expected to toss a wrench into the global trade and investment markets. The Russia-Ukraine War continues to negatively impacts the food, energy, and commodity markets. An effective calming of financial markets has been seen as a result of dollar swaps and central bank currency swap lines by the Federal Reserve.

The G20 Summit 2022 discussed the multifaceted shocks and challenges faced by the global economy. The lingering Covid-19 pandemic and a demand-supply mismatch are further going to slow down the outlook of various economies and global financial markets. India The global economy is expected to face higher-than-expected inflation rates and tightening financial conditions due to increasing energy and food prices leading to increasing cost of living pressure. The long-lasting global challenges have caused increasing debt vulnerabilities and hampered recovery, further impacting the vulnerable group, predominantly low-income and developing countries. In 2023 concrete actions are expected to be taken to tackle the global economic challenges.

Here is how the global slowdown impacted India.

• Exports Drop Below $30 billion in October. It’s the lowest in the last 2 years
• Trade Gap Widens to Nearly 27 Billion
• Imports have slightly $57 Billion.
• Depreciation of Rupees After G20 Summit. The rupee is expected to depreciate more in 2023.
• Fertilizer Subsidy peaked in FY23 and is expected to decline from next year.
• India is expected to witness debt vulnerabilities.
• Slight Revision in the prices of Crude and Diesel

G20 Summit 2023 Priorities for India’s Presidency

India’s G20 Summit 2023 Presidency shall entail over 250 meetings across 50 Indian cities involving the participation of leading ministers, officials, government officials, and civil society leading to a marquee summit to be held in India’s capital city New Delhi in September 2023. The G20 Summit 2023 shall be attended by over 100,000 people, including heads of state and central government from G20 members and other invited countries. India has recently announced the theme for G20 Summit 2023. It is “Vasudhaiva Kutumbakam” or “ One Earth, One Family, One Future”.

India’s Prime Minister Narendra Modi has highlighted “The need to depoliticize the global supply of food, fertilizers, and medical products so that the geo-political tensions do not lead to a humanitarian crisis.

India is expected to maintain policy continuity from Indonesia if it wishes to make a mark on the G20 disclosure. Some significant priority issues for India are;

• Woman Empowerment
• Energy Security and Transitions
• Climate: Financing and the Green Hydrogen Mission, Accelerated Pace of Sustainable Development Goals (SDGs)
• Leveraging the Blue Economy
• Reform of Multilateral Organizations
• Fight against economic crime
• Disaster resilience
• Digital Public Infrastructure and Tech-Enabled Educational Development, Livelihood Improvement
• Global Health Infrastructure, Health Financing, and Digitization of Service Delivery

G20 Summit 2023 Impact on India’s Stock Market and Economy

As a result of India’s G20 Summit 2023 Presidency, Indian Stock Markets is expected to see an uptick in 2023, especially in sectors such as Real Estate, Banking, automobiles, and Company Stocks with strong fundamentals. The consumer space is expected to see a strong revival, with many other categories normalizing to pre-covid levels.. QSR space is expected to have superior returns. Affordable Housing is also expected to get a significant push in 2023.

With the US market contributing 40 to 75 percent of the revenues earned by the Indian IT companies, the US and global recession is expected to pose a threat to India’

For debt, investment-grade-rated instruments should be on top of the list. With interest rates at peak, it is a good time to lock in a yield for your safer debt instruments. In particular, look for corporate bonds issued by established companies with strong fundamentals.?For equity, going with large and mid-cap stocks, which are more value-based in nature than growth-based, is a wise decision

India’s greatest strength in the 2023 investment market lies in its domestic consumption. While near-term impact due to global issues could continue and bring volatility, investors with a horizon of a minimum of two to three years shall be well rewarded

To know more about leveraging India’s G20 Summit 2023 Presidency for wealth creation, get in touch with Team Eureka, and we shall be happy to help you.?