G20 : Economic Cooperation ahead

PM to attend G-7 summit in Germany


From UPSC perspective, the following things are important :

Prelims level: G7, G12, G20

Mains level: G7

PM Modi will fly to the Germany as a special invitee to the meeting of G-7 countries.

Group of 7

  • The G-7 or ‘Group of Seven’ includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
  • It is an intergovernmental organisation that was formed in 1975 by the top economies of the time as an informal forum to discuss pressing world issues.
  • Initially, it was formed as an effort by the US and its allies to discuss economic issues.
  • The G-7 forum now discusses several challenges such as oil prices and many pressing issues such as financial crises, terrorism, arms control, and drug trafficking.
  • It does not have a formal constitution or a fixed headquarters. The decisions taken by leaders during annual summits are non-binding.
  • Canada joined the group in 1976, and the European Union began attending in 1977.

Evolution of the G-7

  • When it started in 1975—with six members, Canada joining a year later—it represented about 70% of the world economy.
  • And it was a cosy club for tackling issues such as the response to oil shocks.
  • Now it accounts for about 40% of global GDP.
  • Since the global financial crisis of 2007-09 it has sometimes been overshadowed by the broader G20.
  • The G-7 became the G-8 in 1997 when Russia was invited to join.

Why was Russia expelled?

  • The G-7 was known as the ‘G-8’ for several years after the original seven were joined by Russia in 1997.
  • The Group returned to being called G-7 after Russia was expelled as a member in 2014 following the latter’s annexation of the Crimea region of Ukraine.
  • Since his election in 2016, President Trump has suggested on several occasions that Russia be added again, given what he described as Moscow’s global strategic importance.

Why in news now?

  • New Delhi is preparing for more pressure from the G-7 countries.
  • These countries (Canada, France, Germany, Italy, Japan, the UK, the US and the EU) have unitedly imposed sanctions on Russia since it invaded Ukraine.
  • They want India to cooperate in restricting its purchase of Russian oil, not circumvent the sanctions by using a rupee-rouble mechanism.
  • It also wants India to lift the ban on the export of wheat.

Relevance of G7 for India

  • India will get more voice, more influence and more power by entering the G7.
  • After UN Security Council (UNSC), this is the most influential grouping.
  • If the group is expanded it will collectively address certain humongous issues in the global order.
  • Diplomatically, a seat at the high table could help New Delhi further its security and foreign policy interests, especially at the nuclear club and UNSC reforms.
  • It will further protect its interests in the Indian Ocean.

Challenges for India’s entry

  • The decision to expand the grouping cannot be taken by the US alone.
  • There needs to be a consensus.
  • However, a special invitation to India is no mean achievement.


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