India urges G20 to find ways to shrink widening trade finance gap

Source: The post is based on the article “India urges G20 to find ways to shrink widening trade finance gap” published in The Hindu on 29th March 2023.

What is the News?

Under India’s Presidency, the first G20 Trade and Investment Working Group (TIWG) meeting has been conducted. In this, India highlighted the widening trade finance gap. As estimated by ADB, the Trade finance gap was $1.5 trillion in 2018 and has now increased to $2 trillion.

About the G20 TIWG meeting

Aim: To build a shared understanding of the challenges faced in global trade and investment, and utilise existing opportunities for the benefit of humanity and find common solutions.

Participants: Over 100 delegates from G20 member countries, invitee countries, regional groupings and international organisations.

What are the key solutions discussed in the G20 TIWG meeting for reducing the trade finance gap?

-The role banks, financial institutions, development finance institutions, and export credit agencies could play to identify the gaps and address the challenges in the trade finance arena amidst the uncertain global trade landscape.

-There is a need to accelerate digitalisation as well as the adoption of fintech solutions for improving access to trade finance.

–Digitalisation of international trade: International cooperation in harmonising definitions, standards and data sharing across borders digitally is required.

-All nations should endeavour to adopt enabling legislation in the next few years to achieve paperless international trade.