Basics and Backgrounds

  • The Group brings together eight major industrial economies of the world for consultation and policy coordination at the highest level.
  • The origins of the Group can be traced back to November 1975 when the then President of France, Velary Giscard d’ Estaing, and the German Chancellor, Helmut Schmidt, invited the US, Britain, Italy and Japan for a meeting at the Chateau of Rambouillet, France, to discuss the economic crisis resulting from the rise of oil prices.
  • Another member, Canada, attended the meeting of the group in June 1976 in San Juan, Puerto Rico, and the Group of Seven (G-7) was formally created.
  • The G-7 became an international forum for discussing various issues like economic growth, inflation, unemployment, trade ailments and other problems confronted by the developed nations.
  • At the 20th G-7 summit, held in Naples, Italy, in July 1997, at the summit in Denver, the US, Russia became a full-fledged member, and the G-7 was renamed as the Group of Eight (G-8) or the Group of Seven plus One (G-7 + 1).
  • In March 2014, Russia was cast out of the Group of 8 due to its involvement in the 2014 Crimea crisis in Ukraine.


  • The Group aims at deliberating on and evolving strategies to deal with the major economic and political international issues.


  • The G-8 Constitutes of Canada, France, Germany, Italy, Japan, Russia, the UK and the USA.
  • There are no formal criteria for membership, but participants are all highly developed democracies.
  • The aggregate GDP of G-7 member states makes up nearly 50% of the global economy and 10% of the world’s population.


  • The group does not have a permanent secretariat, or offices for its members.
  • The presidency of the group rotates annually among member countries, with each new term beginning on 1 January of the year.
  • The rotation order is: France, the United States, the United Kingdom, Russia (suspended), Germany, Japan, Italy, and Canada.
  • The country holding the presidency is responsible for planning and hosting a series of ministerial-level meetings, leading up to a mid-year summit attended by the heads of government.
  • The president of the European Commission participates as an equal in all summit events.

Summit Participation

  • Summits are held annually and hosted on a rotationbasis by the group’s members. The host country not only holds the G7 presidency but also sets the agenda for the year.
  • Invitation to Global leadersare sent by host nation to participate in summit as special invitees. Countries like China, India, Mexico, and Brazil have attended summit at various occasions.
  • The leaders of important international organizationslike European Union, IMF, World Bank and the United Nations are also invited.


  • 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.

Facts about G-7

  • Leading export countries
  • Largest gold reserves
  • Largest nuclear energy producers
  • Top contributors to the UN budget

G-7 Vs G-20

  • The G-20 is a larger group of countries and was formed in 1999, which also includes G7 members and was formed 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.
  • The G20 members represent around 80% of the world’s economic output, two-thirds of the global population and three-quarters of international trade.

G-7 and FATF

  • In response to mounting concern over money laundering, the Financial Action Task Force on Money Laundering (FATF) was established by the G-7 groping in Paris in 1989.
  • In 2001 its mandate expanded to include terrorism financing.
  • Recognising the threat posed to the banking system and financial institutions, the G-7 Heads of State or Government and President of the European Commission convened the Task Force from the G-7 member States, the European Commission and eight other countries.
  • The FATF’s primary objective is to ensure that “financial systems and the broader economy are protected from the threats of money laundering and the financing of terrorism and proliferation, thereby strengthening financial sector integrity and contributing to safety and security.”


  • G7 is capable of setting the global agenda because decisions taken by these major economic powers have a real impact.
  • Thus, decisions taken at the G7 are not legally binding, but exert strong political influence.

2019 G7 Summit

  • Presided over by France, will focus on fighting inequality.
  • France has identified the following five objectives for the Summit:
    1. fighting inequality of opportunity, promoting in particular gender equality, access to education and high quality health services
    2. reducing environmental inequality
    3. strengthening the social dimension of globalization
    4. taking action for peace against security threats and terrorism
    5. tapping into the opportunities created by digital technology and artificial intelligence (AI).

India at G7

  • PM Modi is a participant at the 45th G7 summit at the special invitation of French President Emmanuel Macron, as India is not a member of the group of seven.
  • The Ministry of External Affairs (MEA) referred to the invitation as a “reflection of the personal chemistry” between the two leaders and also recognition of India as a major economic power.
  • PM Modi reached Biarritz, France for the summit on August 25 after his three-nation tour of France, UAE and Bahrain.

Key takeaways from the G7 summit

  1. G7 might consider reinstating Russia
    • US President Donald Trump pressed the G7 group to reinstate Russia as a permanent member of the grouping, saying it would be better to have Russia inside the group than outside.
    • However, no consensus was reached on whether or not to invite Russia to the next year’s G7 summit in the United States.
    • French President Emmanuel Macron said that he and German Chancellor Angela Merkel would be organizing a summit in the coming weeks with the Russian and Ukrainian leaders to obtain results on the Ukraine crisis.
  1. Trump open to talks with Iran 
    • Donald Trump said that he was open to meet Iran’s President under the right circumstances to end the confrontations over the 2015 nuclear deal and that talks were underway to see how countries could open up credit lines to keep Iran’s economy afloat.
    • Trump, however, ruled out compensating for losses suffered by Iran and made crippling sanctions.
  1. Trump opens doors to a possible trade deal with China
    • The G7 leaders had expressed concern during their summit meeting that trump’s trade war with China could spiral outward and called for a sensible resolution.
    • However, US President Donald Trump in a welcoming move opened the path for a possible trade deal with China following days of an intense trade war.
    • The US-China trade war has had a damaging effect on the global economy and overall GDP.
  1. Trump skips session on ‘climate and biodiversity’
    • The G7 summit this year laid increasing focus on climate change amid a backdrop of the burning Amazon, a month after the Earth recorded its hottest month ever.
    • However, US President Donald Trump who claimed to be an environmentalist in a press conference later notably skipped the climate crisis meeting of the G7.
    • Trump defended his absence saying that the US wealth is based on energy exports and he is not going to lose it on dreams.
  1. India- Pakistan tensions expected to lighten
    • Indian Prime Minister Narendra Modi while interacting with the media alongside US President Donald Trump said that all issues between India and Pakistan are bilateral and that is why India does not don’t want to trouble any third country.
    • Modi reiterated that India and Pakistan were together before 1947 and he was confident that the two nations can discuss and resolve these issues bilaterally.
  1. G7 leaders support Hong Kong’s autonomy
    • The G7 leaders confirmed the existence and importance of the Sino-British Joint Declaration of 1984 on Hong Kong and called for violence to be avoided.
  1. US-UK trade deal
    • US President Donald Trump vowed to work out a very big trade deal, bigger than ever with the United Kingdom after Brexit.
    • The US president stated that the British would lose the anchor
  1. US-Japan trade agreement 
    • US President Donald Trump announced locking of a new trade agreement with Prime Minister Shinzo Abe of Japan.
    • The deal aims to secure market access for several American agricultural goods and Japan has agreed to purchase large sums of corn from the US.around their ankle after leaving the EU.

Proposal for G-7 Expansion

  • S. President Donald Trump announced that he would like to expand G-7 to a G-11, by adding India, Russia, South Korea and Australia.
  • US President followed up his announcement with invitations to these four country’s leaders, to attend the 2020’s G-7 summit in the U.S.

Reaction of countries on G-11 plan

  • Indiahas welcomed the decision and commended Trump for his “creative and far-sighted” decision to expand the format of the grouping to keep up with the new realities of the “post-COVID world”.
  • Australia and South Koreahave also welcomed the invitation,
  • Russia, that lost its membership of the grouping in 2014 over its annexation of Crimea, has stated it would attend “if treated as an equal”

Consequences of G-11 plan for India

  • The proposed G-11 grouping would recognise India’s place amongst the world’s richest nations. Membership will acknowledge India’s global voice
  • It will provide a platformfor India to address its concerns like terrorism and ensure that world work towards it
  • It helps increase the soft powerof India
  • Exclusion of Chinafrom G-11 means possible strengthening of India’s alliance against China
  • This is step in democratizationof international institutions which are facing the criticism of being biased in favour of developed countries

Critical Analysis of G-11 Plan

  • Improves Effectiveness: Expansion is needed to improve the groupings effectiveness as a multilateral forum to arrive at consensus on issues like climate change, security contributions, Iran, etc
  • Against G-8+ 5:China, India, Brazil, Mexico and South Africa, were invited regularly to G-8 summits as an outreach by the developed world to the five emerging economies. The G-11 plan leaves out all these members except India
  • Potential fora for Cold War:The summit appears aimed at fuelling a new Cold War between the U.S. and China.
  • Adds fire to US-China tensions:US and China are fighting each other over trade, IPR, 5G Technology, Hong Kong, South China Sea, Climate issues and recently over origins of Coronavirus. This action by US will further widen their rift
  • Long Way:As host, Mr. Trump can invite any country as a G-7 special invitee, but changing its composition will require the approval of the other members.
  • Opposition from within G-7: There are some concerns by European countries over Russia joining the group, which could derail the entire G-11 plan
  • Short term Challenges: It is unclear when the summit will actually be held, given the November polls in the U.S. This might derail the plan in initial stages itself.

Criticism of G7 group

  • At the first ‘G6’ meeting in 1975, it was clear that all of the world’s economic powers were in attendance. The countries present were specially selected, as they were the major advanced economies, and they had the financial impetus to provide an effective solution to the most pressing issue of the moment: the looming global economic crisis. However, the G7’s current share of the world’s GDP is 29% lower than that which it owned in the mid-1980’s.
  • The loss of economic power represents a great problem for many of the countries involved in the G7. We now live ‘in a G-Zero world, one in which no single country or bloc of countries has the political and economic leverage—or the will—to drive a truly international agenda’.
  • In relation to legitimacy and political clout, the G20 has one undeniable advantage over the G7. Namely, the G20 represents a wider range of countries, and a far greater proportion of the world’s population, with the G7 representing approximately 10%, whilst the G20 accounts for two-thirds. Linked to this is the argument that the G7 only discusses issues which are relevant to the G7 countries, whereas the G20’s members exhibit a far greater variety in their geography, politics and cultures, encouraging a wide-ranging agenda, and therefore a far greater mandate when attempting to address global issues.
  • G7 has no permanent secretariat to look after the decisions taken at the meetings.
  • It’s decisions are also not binding on the members.
  • G7 countries are most developed countries in the world and these are also responsible for the climate change and global warming. But these countries failed to deliver their commitments under Kyoto Protocol. USA, the lage economy in the world even withdrew from Kyoto Protocol and Paris Agreement.