EXPANDING G7 WHAT DOES IT MEAN FOR INDIA?

Recently US President Donald Trump announced to postpone the G7 summit to September calling the G7 as a ‘group of outdated countries’ and decided to expand the grouping with liberal democracies like Australia, India, South Korea and Russia.

- KANNAN R NAIR*

Later on in a phone conversation with Indian PM Narendra Modi, Trump invited India to participate in the next G7 summit to be hosted by the United States. India has attended several G7 summits previously, but Trump’s invitation to the 2020 summit and his remarks on expanding G7 bring about ample opportunities and challenges before New Delhi in strategic, political and economic realms.

The inclusion of emerging economies like India will strengthen the grouping, which loosened after Russia’s removal in 2014. Anyhow, the structure will remain incomplete, owing to the exclusion of China, which is the second-largest economy in the world. However, the extended G7 will help India to improve its relations with advanced economies and can attract more investments in the future.

What is G7?

The G7 is a group of elite advanced economies formed as a response to the embargo imposed by OAPEC (Organization of Arab Petroleum Exporting Countries) on the United States, Japan, Canada and Netherlands lead for causing the 1973 oil crisis. This crisis shackled the western economies due to their over-reliance on the Middle East for oil supplies. As a response in 1975, France invited the UK, US, Japan, Italy, Germany for a formal arrangement of developed economies to redesign the world order. This grouping became G7 when Canada joined the organization in 1976. With Russia’s inclusion in 1998, the grouping was termed as G8 till 2014. In 2014, Russia was expelled from the forum due to its seizure of Crimea from Ukraine.