Why Does the G7 Need India? – The Diplomat

Indian Prime Minister Narendra Modi is visiting Hiroshima, Japan, from Could 19 to 21 the place he’ll characterize India as an invited nation on the forty ninth G-7 Summit. This engagement comes amid a busy diplomatic schedule for India, which holds the presidency of the G-20 and the Shanghai Cooperation Group (SCO) for 2023. The G-7 Summit is thus a platform for India to take its many multilateral engagements ahead. For the G-7, participating with India is crucial for a number of causes.

First, with a GDP of $2.66 trillion, India’s financial system is bigger than three member nations of the G-7 – France, Italy, and Canada. In keeping with the Worldwide Financial Fund (IMF), India is one of many quickest rising economies on this planet and is predicted to develop at 5.9 % in 2023-2024. India can be the quickest rising financial system in Asia. The World Financial institution has stated that India’s progress charge is the highest among the many seven largest emerging-market and growing economies.  

India’s financial progress is in distinction with that of Western nations, most of that are going through stagnant progress prospects. Anne-Marie Gulde-Wolf, deputy director for the Asia and Pacific division of the IMF, stated that India may very well be a key financial engine able to driving international progress by way of consumption, funding, and commerce. As an outlier amongst world’s main economies, India stays an enticing funding vacation spot resulting from components comparable to market potential, low manufacturing prices, enterprise reforms, and a positive industrial local weather.

Lately India surpassed China as essentially the most populous nation on this planet. With 68 % of the inhabitants of working age (15-64 years) and 65 % of the inhabitants beneath the age of 35, India gives a younger and considerable expert and semi-skilled work power. 

Second, together with the USA and Japan, the European nations are formulating their insurance policies to have interaction extra with the Indo-Pacific area. Previously few years, the UK, France, and Germany – G-7 members from Europe – have formulated their very own Indo-Pacific methods. Italy too has proven inclination not too long ago to have interaction with the Indo-Pacific area. 

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With the worldwide geopolitical and financial epicenter shifting to the Indo-Pacific, European nations are eager to learn from the financial alternatives that the area gives. Nevertheless, the Indo-Pacific has its personal challenges with a belligerent China increasing its strategic and financial footprint. For the Western nations, India has emerged as a significant strategic accomplice to include China, notably within the Indian Ocean part of the Indo-Pacific area. Of the G-7 members, India has strategic partnerships with the U.S., the U.Okay., France, Germany, and Japan. India’s relations with Italy are quickly increasing within the strategic area.

Third, India has unexpectedly turn into a transit nation to resolve the European power disaster attributable to the Russia-Ukraine battle. Earlier than the battle began, Europe secured round 40 % of its oil and fuel provide from Russia. European nations plunged into an power disaster as they decreased power purchases from Russia over the course of the previous yr.

For its half, Russia provided its oil to India at discounted costs to compensate for the loss incurred resulting from European nations decreasing their oil imports from Russia. On account of securing power provides at discounted costs, India has elevated its oil purchases from Russia. Russia has turn into India’s high provider of oil.  

Nevertheless European nations have additionally benefited from India’s oil purchases from Russia. India has turn into a backdoor for the European nations to buy Russian oil. The ban on Russian oil has led to European nations’ elevated reliance on India for securing power provide. Russian crude oil, after present process refining course of in India, is discovering its means into Europe. India turned the largest provider of refined fuels to Europe in April. This association has ensured that India was not directly answerable for easing the burden on the European economies to a sure extent.

Fourth, India is without doubt one of the few nations on this planet to have cordial ties with each Russia and the West. The battle in Ukraine has dragged on for multiple yr ad infinitum. The state of affairs at current may very well be greatest described as heading towards a stalemate. 

As Western nations proceed supplying arms to Ukraine, Moscow has additionally been intensifying assaults on Kyiv. The battle has already disrupted economies and provide chains for a lot of Western nations. India may, by way of direct or oblique mediation, supply a face-saving choice to each the warring sides in close to future. India’s method of balancing ties with Russia and the West may assume significance in case of any chance of dialogue and diplomacy to finish the battle. 

Whether or not or not the G-7 expands to a G-8 once more, this time to accommodate India, stays to be seen. Nevertheless India’s engagements with the G-7 are crucial to handle the challenges the grouping is going through.