Backdrop:
The 2025 G7 summit in Alberta, Canada, is occurring amid global turbulence—wars in Ukraine and Gaza, rising tensions between Israel and Iran, and instability in the Indo-Pacific due to China’s maneuvers. While a US-China trade truce and India-Pakistan ceasefire exist, global geopolitics remain volatile.
This aligns with Realist theories in International Relations, which emphasize the anarchic nature of the international system, state-centric power struggles, and the perpetual quest for security and influence.
🟦 Realist Theory:
States are like competitors in a game, each seeking their own power and security in a world without a central authority.
Shifting Influence:
The G7 in its heyday was an extremely powerful grouping on account of its overwhelming share of the global GDP. For instance, in the 1980s, the G7’s share of global GDP was almost 70 per cent. The share in 2024 is barely above 30 per cent. The main reason for this is that the economic centre of gravity has shifted from the West to the East, led by China but also because of countries like India.
China is not part of G7. Neither is Russia. This does bestow some leverage on India, which practices strategic autonomy, follows an independent foreign policy and more broadly, represents the Global South.
The G7’s declining share of global GDP—from ~70% in the 1980s to just over 30% today—reflects the World Systems Theory and Global Power Shift. The rise of China and India as economic powerhouses exemplifies the move from a unipolar or Western-dominated system to a more multipolar world order, supporting Neorealist notions of power balancing and the redistribution of global influence
🟦 World Systems Theory:
The world is divided into “core” (wealthy) and “periphery” (developing) countries, but the economic center can shift over time as new powers rise.
🟦 Multipolarity (Neorealism):
Instead of one or two big powers, several strong countries now influence world affairs, making the system more complex.
G7’s Renewed Relevance:
Until recently, the G7 was dismissed as “yesterday’s club”, especially after the formation of the G20. But a combination of geopolitical factors means G7 can have another shot at being relevant.
This also has to do with the UN Security Council’s increasing powerlessness, the gradual irrelevance of WTO and America’s decision to pull out of the WHO and the Paris Climate Accord.
The G20 (after an impressive showing by India under its presidency) is mired in difficulty for a variety of reasons. The G7 could fill a vacuum in the international relations system.
The G7 could regain significance due to the UN Security Council’s ineffectiveness, the diminishing role of the WTO, the US withdrawal from global agreements, and the current dysfunction within the G20.
The G7, once dismissed as obsolete (“yesterday’s club”), is experiencing a resurgence due to the declining effectiveness of global governance institutions like the UN Security Council and WTO. This shift supports Regime Theory, which posits that international institutions become more or less relevant depending on their ability to adapt to new power realities. The relative ineffectiveness of the G20 and the US withdrawal from key multilateral agreements highlight the Limits of Liberal Institutionalism, pointing to a renewed reliance on smaller, more cohesive groupings.
🟦 Regime Theory:
International organizations matter only if they help states achieve their goals and adapt to changes.
🟦 Liberal Institutionalism:
Cooperation is possible through institutions, but if they stop working, states look for other ways to cooperate.
Canada’s Summit Goals:
Canada has set three broad goals for the Alberta Summit.
- Peace and security—countering foreign interference and transnational crime.
- Energy security and digital transition—strengthening critical mineral supply chains and leveraging AI/quantum tech.
- Infrastructure and jobs—boosting private investment for better jobs and stronger infrastructure.
Canada’s leadership could deliver a strong summit declaration if consensus is achieved.
India’s Role:
The invitation to India to attend the summit was a non-issue. It is hard to believe India, which has been part of 12 G7 Summits, could have been overlooked. In response to odd voices in Canada arguing against an invitation to Prime Minister Narendra Modi, the newly minted Canadian premier put it well: “As chair of the G7, it is important to invite the most important countries to attend to talk about issues such as energy, artificial intelligence, critical minerals, and India is really at the very centre of global supply chains.”
India’s invitation was natural, reflecting its central role in global supply chains and its experience at past G7 summits. PM Modi’s participation, including bilateral talks with Canadian PM Carney, could influence global opinion, especially post-“Operation Sindoor.”
India’s inclusion and growing leverage reflects its adherence to Non-Alignment and Strategic Autonomy—core tenets of India’s foreign policy, resonating with the Constructivist Theory (India as a norm entrepreneur representing the Global South).
🟦 Strategic Autonomy/Non-Alignment:
India avoids being tied to any single major power, choosing its partners and policies freely.
🟦 Constructivist Theory:
Countries can shape world politics based on their unique ideas, values, and roles (like India’s leadership for the Global South).
Indo-Canadian Relations:
On Indo-Canadian ties, the fact of the matter is that India took the first steps to initiate a rapprochement with Canada. When Mark Carney was elected as Canada’s Premier, PM Modi made it a point to reach out and congratulate him. The foreign ministers of India and Canada spoke over the phone and committed themselves to improving bilateral relations.
It is hoped by many well-wishers that PM Modi and PM Carney can hit it off when they sit together for a bilateral meeting in Alberta. The best possible and immediate outcome would be the quick reinstatement of high commissioners in both Delhi and Ottawa with substantial restoration of the strength of both diplomatic missions.
Canada and India have too much at stake in the relationship to allow it to be derailed. The geopolitical uncertainty along with strategic turbulence means that both countries stand to gain enormously by not just restoring their ties to status quo ante, but also to chart a clear trajectory for taking the relationship to the next level.
In short:
The Alberta G7 Summit is a meeting point of old and new powers, new alliances, and shifting global roles. These political science theories help explain why countries act the way they do and why summits like this matter for the future.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.