The Group of 20 emerging and developed economies meeting in Gyeongju, South Korea, today agreed on increasing the voting rights of emerging economies at the International Monetary Fund (IMF) but failed to agree on the broader issues of trade imbalances and currency pricing.

The governance reform will make China the third largest member of the 187-strong Washington-based lender while India will become its eighth largest member with a 2.75 per cent voting share.

The deal, brokered by IMF managing director Dominique Strauss-Kahn, will shift two seats on the 24-member IMF executive board and over 6 per cent of the voting power at the Fund from developed countries to the fast-growing developing economies.

"This makes for the biggest reform ever in the governance of the institution," Strauss-Kahn said after the accord.

Speaking on the sidelines of the G20 meeting in South Korea, India's finance minister Pranab Mukherjee said the reform that will give increased voting rights and board seats to emerging economies will only start in 2013.

Under the deal, Europe will surrender two of the nine seats it currently holds in the IMF board while the US will retain its 16.67 per cent voting share and veto power.

Any change in Washington's IMF quotas, or membership subscriptions, will continue to require a super-majority vote of 85 per cent and the US is expected to retain its veto on all important decisions of the Fund.

While nations agreed on a shift of voting rights to developing countries such as China, India and Brazil, the G20 failed to agree on the broader issues of trade and currency regulations.

Focus shifted to increasing the IMF clout of emerging engines of global economic growth such as India and Brazil, the G20 negotiators seem to have lost focus on stable economic growth and the exchange rate dynamics.

The governance reform, the first since the inception of the IMF after World War II, falls short of an overhaul of the global economic order.

The IMF's big five - the United States, Japan, Germany, France and Britain - will retain their seats but will now have to get them elected by the full board. China, Russia and Saudi Arabia too will have their seats on the board.

The rest of the members, including emerging economies, will function in groups with each group or constituency electing an executive director to vote for the group as a whole.