G-7 and India

INTERNATIONAL/ ECONOMY

Topic:

• GS-2: Effect of policies and politics of developed and developing countries on India’s interests 
• GS-2: Regional groupings involving India and/or affecting India’s interests.

G-7 and India

Context: At the invitation of UK Prime Minister Boris Johnson, Prime Minister Narendra Modi will participate in the Outreach Sessions of the G7 Summit on June 12 and June 13, in virtual format.

The UK currently holds the presidency of the G7 and has invited India, along with Australia, Republic of Korea and South Africa, as guest countries for the Summit.

About G-7

• The G7 comprises the US, UK, France, Germany, Italy, Canada and Japan. 
• It is an intergovernmental organisation that was formed in 1975.
• The bloc meets annually to discuss issues of common interest like global economic governance, international security and energy policy.
• The G-7 does not have a formal constitution or a fixed headquarters. The decisions taken by leaders during annual summits are non-binding.
• The G7 was known as the ‘G8’ for several years after the original seven were joined by Russia in 1997. The Group returned to being called G7 after Russia was expelled as a member in 2014 following the latter’s annexation of the Crimea region of Ukraine

What is on the agenda of G-7 this year?

The theme for the summit is ‘Build Back Better’ and the UK has outlined four priority areas for its presidency. These are 

• Leading the global recovery from coronavirus while strengthening resilience against future pandemics; 
• Promoting future prosperity by championing free and fair trade; 
• Tackling climate change and preserving the planet’s biodiversity; 
• Championing shared values and open societies.

Is India attending it for the first time?

• Since 2014, this is the second time PM Modi will be participating in a G7 meeting. 
• India had been invited by the G7 French Presidency in 2019 to the Biarritz Summit as a “Goodwill Partner” and the Prime Minister participated in the Sessions on ‘Climate, Biodiversity and Oceans’ and ‘Digital Transformation’.
• During Prime Minister Manmohan Singh’s UPA rule, India attended the G8 five times.
• In 2020, US under President Donald Trump had extended an invitation to India. 
• Calling the G7 a “very outdated group” Trump had suggested that the Group of 7 be called “G10 or G11” by including India, Australia, South Korea and Russia. That, however, did not happen owing to the pandemic and the US elections’ outcome.

What to watch out for at this G-7 summit?

• Break from Trump’s America First Policy: This will be US President Joe Biden’s first visit to Europe, where he will signal his key message “America is back”. This will be a shift from Trump’s American First Policy where US withdrew from Global leadership roles.
• US realignment with Russia: After meeting allies at the G7 summit US President Biden continue on to a NATO conclave in Brussels on June 14, before his conversation with Russian President Vladimir Putin in Geneva later. 
• Strategic Rival in China: The key element that is making Washington take the important step of engaging with Moscow to contain the damage in their bilateral ties is that the US wants to focus on its strategic rival, China.
• Reviving Multilateralism: This ties in well with the US President’s initial foray into multilateralism — he held the first summit of leaders of “the Quad” — Australia, India, Japan and the US. This is considered as contrast to Trump’s style of dealing bilaterally.
• Post COVID Economic Recovery: The Group of Seven might make a further joint declaration on “a comprehensive plan to help end this pandemic as rapidly as possible”.
• Global Vaccination: Biden will announce a major new initiative to vaccinate the world against Covid-19 ahead of the G7 summit. According to US media reports, the Biden administration is set to buy 500 million doses of the Pfizer/BioNTech vaccine for international distribution. Doses will be aimed at developing countries.

What’s in it for India?

• Tackling China: With an assertive China looming, the US is calling all like-minded countries to partner in dealing with Beijing. If US and UK want to take the leap forward and constitute a global democratic alliance of 10-11 countries, it will be an important signal.
• Vaccine Shortage: As India faces a massive shortage of vaccines, Delhi will be watching the allocation announced by the US President very carefully. Recently, the US had said that it will distribute vaccines to India as part of it’s “strategy for global vaccine sharing”
• Russia: On Washington’s rapprochement with Moscow, New Delhi will be extremely relieved as the US can then focus on China. This will relieve some tension that are built into India-Russia relationship due to US rivalry with Russia. 

Connecting the dots:

• India and G-11 – Critical Analysis
• G-20
• OECD
• FATF