G7 and India

Published On: 2024-06-23

The 50th G7 Leaders’ Summit recently concluded in Apulia, Italy, with India participating as an Outreach Country. Italy succeeded Japan as the President on January 1, 2024, and will hand over the presidency to Canada on December 31, 2024.

History and Evolution of G7:

• The G7 is an informal grouping of leading industrialized nations: the United States, France, Germany, Japan, the United Kingdom, Italy, and Canada. Representatives of the European Union (EU) are always present at the G7 leaders' summit.
• The first "World Economic Summit," later known as the G7, was launched in 1975 by former French President Valéry Giscard d’Estaing and German Chancellor Helmut Schmidt.
• Initially focused on economic problems of the 1970s, such as the first oil crisis and the collapse of the fixed exchange rate system (Bretton Woods).
• Germany, France, Great Britain, Italy, Japan, and the US agreed on international economic policy and measures to combat the global downturn.
• Canada joined the group in 1976, forming the G7.
• The first talks between the then-European Community and the G7 occurred in London in 1977. Since the Ottawa Summit of 1981, the EU has participated in all working sessions.
• In 1998, the Group of Eight was formed with Russia’s inclusion, but Russia’s membership was suspended in 2014 following its annexation of Crimea.

Mechanism of G7 Summits:

• G7 nations meet at annual summits presided over by member leaders on a rotating basis.
• The host country can invite dignitaries from outside the G7 to attend the Summit.
• "Sherpas" (representatives of members) handle the groundwork, including discussion topics and follow-up meetings.
• Summits conclude with a non-binding communique summarizing key political commitments.
• The G7 lacks a formal constitution or fixed headquarters. The presidency rotates annually among member states, but the EU does not hold the rotating presidency.

G7 and G20:

• The G20, formed in 1999, includes G7 members and other major economies like Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.
• The G20 focuses on global economic concerns and financial markets, while the G7 discusses a wider range of issues.

G7 Summit 2024:

• The agenda included defending the "rules-based international system" amid Russia’s aggression towards Ukraine and addressing the Middle East conflict.
• Priorities included strengthening partnerships with developing nations, especially in Africa, and addressing issues like migration, climate change, food security, and the implications of artificial intelligence (AI).

Key Highlights of G7 Summit 2024:

• Key discussions focused on global conflicts, notably the Russia-Ukraine war and Israel-Hamas conflict.
• The US and Ukraine signed a 10-year security agreement to bolster Ukraine’s defense against Russia.
• The G7 leaders agreed to a $50 billion loan package for Ukraine, using interest from Russia’s frozen central bank assets as collateral.
• The UK announced new sanctions targeting entities involved in supplying military goods to Russia.

Relevance of G7:

• Achievements:
  • In 1997, G7 countries agreed to provide $300 million to contain the effects of the Chernobyl reactor meltdown.
  • At the 2002 summit, members launched a coordinated response to combat AIDS, Tuberculosis, and Malaria, leading to the formation of the Global Fund.
  • The Global Apollo Program, launched at the 2015 G7 summit, aims to make clean electricity cheaper than coal-fired power within 10 years.
• Criticism and Shortcomings:
  • The G7 faces criticism for being exclusive and disproportionately influencing the world economy, such as the impact of the 1985 Plaza Accord on global currency markets.
  • Its exclusion of major economies like India and China questions its effectiveness. The G7’s share of global GDP has declined from about 50% in the 1970s to around 30% in 2018.
  • Internal disagreements on issues like climate change have also drawn criticism. For instance, then US President Donald Trump was often at odds with other G7 leaders and skipped a meeting on climate issues in 2019.

India’s Participation in G7:

• India's economic growth and geopolitical role as a "swing state" have made it significant. India's GDP is expected to surpass Japan’s next year and Germany’s in a few years, making it larger than all G7 economies except the US.

Significance of the G7 for India:

The G7 provides a forum for India to strengthen relations with leading economies. It helps India position itself as a global mediator, regional manager, and mobilizer against China’s threat. By diversifying supply chains and fostering technological cooperation, India can promote regional and global economic restructuring. India has long advocated for reforming global institutions to reflect modern geopolitical realities