G20 : Economic Cooperation ahead

UK invites India to attend G7 Summit

Note4Students

From UPSC perspective, the following things are important :

Prelims level : G7. G8, G20

Mains level : G7 and its significance for India

The United Kingdom has invited PM Modi to attend the G7 summit that is scheduled to be held in June.

Note the members of G7 and G20. UPSC may puzzle you asking which G20 nation isn’t a member of G7.

G7 Countries

  • 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 cozy 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.
  • In 2014, Russia was debarred after it took over Crimea.

Significance of G7 for India

  • India will get more voice, more influence, and more power by entering the G7.
  • After the UN Security Council (UNSC), this is the most influential grouping.
  • If the group is expanded it will collectively address the humongous issues created by the Wuhan virus,
  • Diplomatically, a seat at the high table could help India further its security and foreign policy interests, especially at the nuclear club and UN Security Council reform as well as protecting its interests in the Indian Ocean.

Back2Basics: The G-20

  • The G-20 is a larger group of countries, which also includes G7 members.
  • The G-20 was formed in 1999, in response to a felt need to bring more countries on board to address global economic concerns.
  • Apart from the G-7 countries, the G-20 comprises Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.
  • Together, the G-20 countries make up around 80% of the world’s economy.
  • As opposed to the G-7, which discusses a broad range of issues, deliberations at the G-20 are confined to those concerning the global economy and financial markets.
  • India is slated to host a G-20 summit in 2022.
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