• The G7 is an informal grouping of leading industrialised nations, including 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”, which later became the G7, was launched in 1975 by former French President Valéry Giscard d’Estaing and then German Chancellor Helmut Schmidt. Initial concerns were economic problems of the 1970s, including the first oil crisis and the collapse of the system of fixed exchange rates (Bretton Woods).
• Germany, France, Great Britain, Italy, Japan and the US agreed on international economic policy and initial measures to fight the global downturn. Canada became a member of the group at the 1976 summit in Puerto Rico, and with its inclusion, the G7 was born (Not a founding member).
• The first talks between the then-European Community and the G7 took place in London in 1977. Since the Ottawa Summit of 1981, the European Community (now the European Union) has participated in all working sessions. In 1998, at the Birmingham Summit, the Group of Eight was constituted as Russia became a member.
• Russia’s membership was suspended in 2014 following its annexation of Crimea.

Significance of the G7 Grouping

1. Grouping of advanced economies-G7 group controls 60% of global net wealth and drives 46% of global GDP. It also represents 10% of the world’s population.
2. Facilitates Dialogue-The G7 acts as a forum for member nations to have open and frank discussions on critical global issues. This allows them to understand different perspectives and build consensus.
3. Forges Collective Action-G7 aims to develop coordinated political responses to global challenges. This involves collaborative efforts on issues like trade agreements, security threats, or climate change initiatives.
4. Innovations in Governance-The introduction of initiatives like the “Hiroshima AI Process” highlights the G7’s role in addressing emerging technological challenges.
5. Global crisis response-G7 has coordinated actions on global economic recoveries, health emergencies like the COVID-19 pandemic, and geopolitical conflicts including the Russian invasion of Ukraine.

Challenges that the G-7 Group faces

1. G7 is not representative in current times- In the initial years, it accounted for 2/3rd of global GDP. However, the G-7 group now accounts only for 1/3rd on PPP basis and less than 50% on nominal basis (market prices). The emerging 7 (E7) economies of India, China, Indonesia, Brazil, Mexico, Russia, Turkey are not part of it.
2. Failure in tackling Global issues-G7 failed in tackling global issues and challenges of Climate change, terrorism, West Asian crisis, COVID 19 pandemic.
3. Historical Polluters-G-7 accounts for 59% of historical CO2 emissions and pledged phase out fossil fuels. There has been no visible progress of the same and they currently account for twice the CO2 emission than African continent.
4. Trade Conflicts-Trade disputes among G7 members and with other countries disrupt global economic stability. Weakening of rules based of trade regime through WTO and trade wars has active role of G7 countries.
5. Populism and Nationalism-The rise of populist and nationalist movements within G7 countries challenge multilateral cooperation and the G-7 group’s commitment to globalism and liberal democratic values.

Significance of India’s association with G-7 Countries

1. India’s Economic Significance-According to the IMF, India is one of the fastest-growing economies in the world. India’s economy is larger than 4 G-7 member countries – France, Italy, the UK and Canada.
   India’s abundant young and skilled workforce, coupled with its market potential, low manufacturing costs, and favourable business climate, makes it an attractive investment destination.
2. India’s growing strategic Importance in the Indo-Pacific-India has emerged as a major strategic partner for the Western G-7 countries. This has helped in containing China’s expanding influence, particularly in the Indian Ocean.
3. India’s Role in Addressing the European Energy Crisis-India’s ability to secure discounted Russian oil and supply refined fuels to Europe has made it an important player in addressing the European energy crisis.
4. India’s Potential for Mediating the Russia-Ukraine Conflict-India’s long-standing relationships with both Russia and the West makes it a potential mediator in the Russia-Ukraine Conflict.
5. Regulation of AI-India has been an active participant in the debate on the global regulation of AI. With the focus of G-7 countries on the regulation of Artificial Intelligence, India’s association with G-7 countries can help in the development of a common global framework for AI.

Challenges with India’s further deepening of engagement with G-7 Countries

1. Escalating conflict in Europe-With the escalation of conflict in Europe, India finds it hard to duck its consequences. This is reflected in the choice of Indian PM to stay away from the Ukraine peace conference in Switzerland that took place after the G7 summit.
2. Defence Dependence on Russia-India’s reliance on Russia for over 60% of its military equipment creates a complex situation. A strained West-Russia relationship could disrupt supply chains and force India to diversify its defence partnerships.
3. Economic Interdependence-Deep economic ties with both the US and China makes it difficult for India to balance its trade relations with both these countries.
4. Geopolitical Rivalry-The intensified competition between the US and China in the Indian Ocean region forces India to take sides on issues that don’t directly align with its national interests.
5. Non Inclusion of India as a permanent member-G-7 has an obsolete membership structure which does not include the emerging economies like India.

Road ahead

India’s evolving relationship with the G7 signifies its growing importance in global economic and strategic affairs. The synergies between India and G7 nations, driven by shared values and mutual interests, present vast opportunities for collaborative growth. As India continues to rise on the global stage, its partnership with the G7 will play a pivotal role in shaping a balanced and inclusive world order. Following should be the way forward-

1. Deepening Economic Ties-Encouraging investment in sectors like renewable energy, technology, infrastructure and enhancing trade liberalization efforts can bolster economic relations between India and G-7 group.
2. Strategic Collaborations-Strengthening defense cooperation through joint exercises, intelligence sharing, and technology transfers can address common security challenges.
3. Multilateral Engagement-India’s active participation in G7 forums can contribute to shaping inclusive global governance frameworks. Joint efforts in climate action, focusing on sustainable development and green technologies, can set benchmarks for global environmental policies.
4. Technological Innovation-Collaborative efforts in digital infrastructure development, cybersecurity, and artificial intelligence can drive the next wave of technological advancements. Joint research initiatives in fields like biotechnology, space exploration, and renewable energy can foster innovation.