Decline of G20 Amid Shifting Global Power Dynamics

The G20 summit in 2025 has brought into light the diminishing influence of this once very important global forum. The absence of major powers such as the US, China and Russia has transformed the group into a gathering of middle powers. This shift reflects deeper geopolitical changes and challenges in maintaining global cooperation on key economic and security issues.

Origins of the G20

The G20 was established in 2008 in response to the Global Financial Crisis. It expanded the existing Group of Eight by including emerging economies like China and India. The aim was to create a more inclusive platform for addressing global economic challenges. The first summit was held in Washington DC under US leadership.

Early Significance and Achievements

Initially, the G20 played a critical role in stabilising the global economy. Summits in London and Pittsburgh in 2009 focused on coordinated fiscal policies and financial reforms. The group created new institutions and strengthened existing ones to manage economic risks. India welcomed its inclusion as a sign of growing global influence.

Challenges and Declining Relevance

After the initial phase, the G20 struggled to maintain momentum. It failed to tackle broader issues like climate change, trade tensions and migration. Rising nationalism and unilateral actions, especially under US leadership from 2017 to 2021, weakened multilateral cooperation. The Russian invasion of Ukraine further divided members, preventing joint statements.

Impact of Major Power Absences

The absence of the US, China and Russia at recent summits has reduced the G20’s stature. US President Donald Trump’s policies, including trade wars and proposals for a G2 with China, undermined the group’s unity. Russia’s exclusion from the G8 and its ongoing conflict with Ukraine alienated it from the G20. These developments have turned the G20 into a forum dominated by middle powers.

India’s Role and Strategic Adjustments

India, as the 2023 host, attempted to reframe the G20’s focus towards the Global South and included the African Union. However, India’s broader foreign policy is adapting to new realities. It is reconsidering its approach to China and the Quadrilateral Security Dialogue (Quad) amid US unpredictability. India continues to value the East Asia Summit as a key diplomatic platform.

Future Prospects of the G20

The G20 faces an uncertain future. Its inability to address urgent global economic and environmental challenges has eroded its credibility. Without the engagement of the largest powers, the group risks becoming irrelevant. The need for global consensus on climate, trade and migration remains unmet within this forum.

Questions for UPSC:

1. Critically discuss the role of the G20 in managing global financial crises and its evolution over time.
2. Analyse the impact of unilateralism on multilateral institutions like the G20 and the Quadrilateral Security Dialogue in recent years.
3. Examine the challenges posed by climate change and international trade restrictions on global economic governance. How can international forums address these issues effectively?
4. Estimate the significance of emerging economies like India and China in shaping global governance structures and their implications for traditional power blocs.

Answer Hints:

1. Critically discuss the role of the G20 in managing global financial crises and its evolution over time.

1. Established in 2008 in response to the Global Financial Crisis (GFC) to include emerging economies beyond G8.
2. Initially effective in coordinating fiscal policies and creating/reforming financial institutions (e.g., summits in Washington, London, Pittsburgh).
3. China played a vital role in managing the trans-Atlantic financial crisis.
4. Early summits had a focused, action-oriented approach; later meetings became more symbolic and less policy-driven.
5. Failed to sustain momentum in addressing broader global challenges beyond finance, such as climate change and trade.
6. Recent geopolitical tensions and absence of major powers have diminished its effectiveness and relevance.

2. Analyse the impact of unilateralism on multilateral institutions like the G20 and the Quadrilateral Security Dialogue in recent years.

1. US unilateral actions under Trump (trade wars, tariff impositions) undermined multilateral cooperation.
2. Trump’s proposal of a G2 (US-China condominium) sidelined plurilateral forums like G20 and Quad.
3. Russia’s exclusion from G8 and conflicts (Ukraine invasion) fractured G20 unity.
4. Unilateralism reduced attendance and engagement of major powers at G20 summits, weakening its global influence.
5. Quad’s future uncertain as India reassesses ties amid shifting US-China dynamics and Trump’s unpredictability.
6. Unilateralism encourages nationalism and mercantilism, eroding trust needed for effective multilateralism.

3. Examine the challenges posed by climate change and international trade restrictions on global economic governance. How can international forums address these issues effectively?

1. Climate change requires coordinated global action balancing development and environmental protection.
2. Trade restrictions and rising mercantilism disrupt global supply chains and economic interdependence.
3. Migration restrictions affect labor markets and economic security, needing multilateral solutions.
4. G20 has largely failed to formulate binding or effective policies on these issues, reducing its credibility.
5. Effective forums need to build consensus by integrating developmental aspirations with security concerns.
6. Inclusive platforms involving emerging and developed economies can encourage cooperation on climate, trade, and migration.

4. Estimate the significance of emerging economies like India and China in shaping global governance structures and their implications for traditional power blocs.

1. Inclusion of China and India in G20 reflected shift from Western-dominated G8 to more inclusive global governance.
2. China’s economic rise challenges traditional Western economic dominance and demands new roles in global institutions.
3. India views G20 as a platform compensating for limited progress in UN Security Council reforms.
4. Emerging economies push for greater voice in global economic, security, and developmental issues.
5. Traditional power blocs face pressure to accommodate new powers or risk fragmentation of global order.
6. India’s balancing act between US-led alliances (Quad) and outreach to China reflects complex geopolitics.