UPSC Issue at a Glance | G7 and India: 5 Key Questions You Must Know for Prelims and Mains

Question 1: What is the Group of Seven (G7)?

Answer: The G7 is an informal grouping of leading industrialised nations, which include the United States, France, Germany, Japan, the United Kingdom, Italy and Canada. Representatives of the European Union (EU) are always present at the annual meeting of the heads of state and government of the G7.EU is represented at the G7 summits by the President of the European Council and the President of the European Commission.

The Members

1. France: France and Germany launched the World Economic Summit in 1975, which later became the G7. The first G7 Summit took place at Château de Rambouillet in France.

2. UK: The United Kingdom has belonged to the group of advanced economic nations since 1975. The country has hosted numerous summits.

3. Italy: Italy was also part of the first World Economic Summit. On January 1, 2024, Italy assumed the Presidency for the seventh time in its history, succeeding Japan, and will hand it over to Canada on December 31, 2024. 

4. Japan: Japan has also belonged to the group of leading economic nations ever since the first summit in 1975. Japan held the presidency of the G7 in 2023.

5. USA: The United States also took part in the first World Economic Summit in 1975, which later evolved into the G7.

6. Germany: Germany has been a member of the grouping since the first World Economic Summit.

7. Canada: Canada became a member of the group at the 1976 summit in Puerto Rico, and with its inclusion, the G7 was born.

Points to Ponder: 

— What is the European Union and what are its member countries?

— What are the key initiatives of the G7?

Post Read Question:

(1) Consider the following countries:

1. China

2. Japan

3. Iceland

4. France

5. Italy

6. Norway

How many of the above-mentioned countries are members of the G7?

(a) Only two

(b) Only three

(c) Only four

(d) Only five  

(2) In which one of the following groups are all the four countries members of G20? (UPSC CSE 2020)

(a) Argentina, Mexico, South Africa and Turkey

(b) Australia, Canada, Malaysia and New Zealand

(c) Brazil, Iran, Saudi Arabia and Vietnam

(d) Indonesia, Japan, Singapore and South Korea

(Source: Explained: The G-7 group, in which Trump says he wants to include India)

Question 2: What is the history of the G7?

Answer: A short history of the grouping on the G7 Germany website says the first “World Economic Summit”, which later became the G7, was launched in 1975 by former French President Valéry Giscard d’Estaing and then Federal Chancellor Helmut Schmidt. The heads of state and government of Germany, France, Great Britain, Italy, Japan and the US — a Group of Six — met for a fireside chat at Rambouillet Castle in France. The participants exchanged ideas on the economic problems of the 1970s — the first oil crisis and the collapse of the system of fixed exchange rates (Bretton Woods) — and agreed on international economic policy and initial measures to fight the global downturn.

In 1976, Canada was added to the group, and the first G7 met in Puerto Rico. The first talks between the then European Community and the G7 took place in London in 1977, and since the Ottawa Summit of 1981, the European Community (now European Union) has been part of all working sessions.

In the 1980s, the interest of the G7 expanded to include foreign and security policy issues. Then Soviet General Secretary Mikhail Gorbachev was invited to talks on the sidelines of the London Summit in 1991. 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.

Points to Ponder: 

— What was the oil crisis of 1973-74?

— What was the Bretton Woods conference? How did it shape global finance after World War II?

— Map work: Location of G7 countries, Russia, Crimea.

Post Read Question:

(3) Consider the following statements with regard to the G7:

1. The G7 is a formal grouping of leading industrialised nations.

2. The European Union has been part of all working sessions of the G7 since the 1981 Ottawa Summit.

3. The Group of Eight was constituted in 1998 as Russia became a member of the grouping.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

(Source: Explained: Who are the G7? )

Question 3: How does the G7 summit work and what are the key highlights of the G7 Summit 2024?

Answer: The G-7 nations meet at annual summits that are presided over by leaders of member countries on a rotational basis. The summit is an informal gathering that lasts two days, in which leaders of member countries discuss a wide range of global issues. The host country typically gets to invite dignitaries from outside the G-7 to attend the Summit.

The groundwork for the summit, including matters to be discussed and follow-up meetings, is done by the “sherpas”, who are generally personal representatives or members of diplomatic staff such as ambassadors. 

The G7 Summit ends with the release of a communique summarising key political commitments. These communiqués (G7 decisions) have a considerable impact on global governance and decision-making processes however the decisions taken by leaders during annual summits are non-binding. 

Key Highlights of G7 Summit 2024

The 50th G7 Summit 2024 was held in Italy. The agenda included defending the “rules-based international system” amid Russia’s aggression towards Ukraine, addressing the Middle East conflict, and strengthening partnerships with developing nations, especially in Africa. Key priorities included migration, climate change, food security, and the implications of artificial intelligence (AI) for humanity.

Other topics on the agenda included the spread of artificial intelligence and migration issues, particularly concerning the flow of migrants from Africa to Europe, which remains a significant concern for Italy. (AP photo)

The key highlights of the summit are:

1. Key discussions centered on several global conflicts, notably the Russia-Ukraine war and the Israel-Hamas conflict in Gaza. In a significant move, US President Joe Biden and Ukrainian President Volodymyr Zelenskyy signed a 10-year security agreement to bolster Ukraine’s defense against Russia.

2. Additionally, the G7 leaders agreed to a $50 billion loan package for Ukraine, utilizing interest from Russia’s frozen central bank assets as collateral.

3. The UK announced new sanctions targeting entities involved in supplying military goods to Russia, including those based in China, Israel, Kyrgyzstan, and Turkey. These sanctions aim to weaken Russia’s war capabilities in Ukraine.

Points to Ponder: 

— Can the EU hold the presidency of the G7?

— What is G7’s Partnership for Global Infrastructure and Investment (PGII)?

— What is the India-Middle East-Europe Economic Corridor (IMEC)?

Post Read Question:

(4) Consider the following statements:

1. The G-7 does not have a fixed headquarters.

2. The decisions taken by leaders during annual summits are binding.

3. On January 1, 2024, Italy assumed the Presidency of  G7 succeeding Japan.

How many of the statements given above are not correct?

(a) Only one

(b) Only two

(c) All three

(d) None

(Source: Explained: The G-7 group, in which Trump says he wants to include India, G7 Summit in Italy: Day one highlights, )

Question 4: Why was India invited to the G7 summit and what is the significance of the G7 for India?

Answer: 

 Amitabh Mattoo Writes– 

After Prime Minister Narendra Modi’s meetings with the beleaguered “steering committee of the free world” at the G7 outreach summit at Apulia on the Adriatic coast of Italy, it is clear that a fractured and fragile world needs India and its leadership, almost desperately so — much of the West seems to have run out of steam and ideas.

The deepening geopolitical tensions with Beijing, the imperatives of restructuring the global economic order to reduce dependence on China, and the need for the US and Europe to reconnect with the Global South have all created the conditions for a new strategic compact between India and the West. In this context, India’s participation in the G7 summit presents India’s growing salience for the G7. 

India’s position in relation to the West is rising thanks to its economic growth and its geopolitical role as a “swing state”. Next year, India’s aggregate GDP is expected to overtake Japan’s and, a couple of years later, Germany’s. That would put the size of India’s economy ahead of all G7 countries except the US.

C. Raja Mohan Writes–

India, which has been a regular invitee to the G7 gatherings in the last few years, has a stake in developing deeper collaboration with the institutions of the so-called “collective West”. As it confronts more demanding challenges on several global fronts, it is in the interest of the West to draw India into the structures of global governance driven by the G7.

Significance of the G7 for India

India has long called for reforming global institutions and groupings to reflect modern-day geopolitical realities. In this context, the G7 holds great importance for India as it not only provides the forum for strengthening relations with the world’s top leading economies but can also help India transform into a global mediator, a manager of the region, and a mobilizer against the looming threat from China. 

As a member of the Quad with the US, Japan, and Australia, India is already engaged in discussions about regional and global economic restructuring through the diversification of supply chains and greater technological cooperation among trusted friends and partners. Advancing this agenda in G7 is critical for India’s long-term economic prospects. 

Points to Ponder: 

— What is the strategic significance of G7 for India?

— What is QUAD (Quadrilateral Security Dialogue)?

— What do you understand by the terms ‘Global South’ and ‘Global North’?

Post Read Question:

What are the challenges to India’s expanding involvement with the G7 countries? 

(Source: G7, West’s shifting political landscape and India’s growing salience , Express View: Hiroshima G7 summit provides an opportunity for India to seize new economic possibilities, A reboot at G7, What Modi 3.0 should do to make Bharat vishwa bandhu and vishwa guru)

Question 5: Does G7 require to revamp itself in order to reflect the contemporary world?

Answer: The G7 has been the birthplace for several global initiatives. In 1997, the G7 countries agreed to provide $300 million to the effort to contain the effects of the reactor meltdown in Chernobyl. Then, at the 2002 summit, members decided to launch a coordinated response to fight the threat of AIDS, Tuberculosis and Malaria. Their efforts led to the formation of the Global Fund. The Global Apollo Program was launched out of the 2015 G7 summit meeting. 

Despite its achievements, the G7 has also come under significant criticism and has been involved in a number of controversies. Such as:

1. Exclusive and Closed Group: Until the mid-1980s, G7 meetings were held discreetly and informally. However, after discussions at a G7 summit in 1985, member countries subsequently signed the Plaza Accords, an agreement that had major ramifications for global currency markets. Their actions caused strong international backlash, with other nations upset by the fact that a meeting between a small group of countries could have such a disproportionate effect on the world economy. Following that backlash, the G7 began to announce the agenda for their meetings in advance so that markets could prepare themselves for potential changes in global macroeconomic policy. However, several countries and individuals still perceive the G7 as an exclusive, closed group that blatantly exercises their power over other nations.

2. Outdated and Ineffective: The G7 has also been criticised for being outdated and ineffective in recent decades due to its exclusion of two of the world’s largest economies India and China.

Saima Mehta Writes- “Its (G7’s) relevance has been questioned in recent years as the combined share of its members in global GDP has fallen. An analysis from the think tank Bruegel (‘The G7 is dead, long live the G7’) said it declined from roughly 50% in the 1970s to around 30% in 2018. The economic growth of China, India and other emerging economies has led to calls for a more representative global governance structure.”

3. Concern over internal cooperation: Saima Mehta Writes- “There are also concerns about the G7’s ability to achieve cooperation within the group. Then US President Donald Trump was often at odds with other G7 leaders and at the 2019 summit, he skipped a meeting on climate issues.”

Despite its some limitations, the G7 has made significant progress and played an important role in determining international policies. It has played a crucial role in coordinating economic strategies, promoting free and fair trade practices, defining global governance issues, and facilitating security cooperation and development assistance. In this context, some reforms should be done to make the G7 more representative and inclusive.

Points to Ponder: 

— What is the Global Apollo Program?

— What were the Plaza and Louvre Accord?

Post Read Question:

What are the challenges associated with the G7? What steps should be taken to ensure the relevance of the G7 in the dynamic world order?

(Source: Explained: What is the G7?, Italy hosts G7 Summit: Why was the grouping created and what’s on the agenda this year? )