The G7's unravelling and India-Canada reset

Hindustan Times

5 hours ago

The just-concluded G7 meeting marks a key moment, both for the group and for India. The G7's core agenda — supporting economic growth in the developing world — stood in stark contrast to the strategic imperative of addressing the spiralling Iran-Israel conflict in West Asia. Unsurprisingly, the only strong outcome of the summit was the G7 Leaders' statement on the Iran-Israel situation — highlighting that consensus, when achieved, is more likely on geopolitical crises than on economic cooperation. This sense of drift was amplified by US President Donald Trump's abrupt departure from the summit.
This year's G7 meeting may have been a forewarning to how the US's economic and strategic repositioning could test the limits of the western economic consensus. Trump's protectionist policies, especially his aggressive tariff regime, have generated considerable friction between the US and its economic partners — none more so than this year's host, Canada. This reflects a troubling reality that the G7's economic heft and global influence are increasingly being contested as it faces new realities. The G7 faces three key issues: How does it retain its core economic agenda, primarily due to a US that is increasingly inward-looking; second, an America under Trump that is distancing itself from long-standing economic partners; and third, the group's inability to respond cohesively to the rapidly shifting global order driven by emerging powers.
Amid this backdrop of uncertainty and disunity, Prime Minister (PM) Narendra Modi's visit to Canada marked a surprising but welcome turn in bilateral relations. This thaw comes after a prolonged period of diplomatic strain under former Canadian PM Justin Trudeau's tenure. The renewal of ties signals more than a reset — it hints at a strategic recalibration of the G7 itself in response to the shifting global economic landscape, especially the rising influence of the Global South. Canada's India outreach takes on deeper significance as both countries re-evaluate their foreign policy alignments. For Canada, caught between an unpredictable US and an increasingly untrustworthy China, engagement with India offers a stabilising alternative. In this regard, the India-Canada Joint Statement's emphasis on 'shared democratic values, respect for the rule of law, and commitment to the principles of sovereignty and territorial integrity,' along with mutual sensitivities marks a significant and welcome departure from the tensions of recent years.
The decision to reinstate respective high commissioners, resume senior ministerial and working-level engagements, and identify areas of cooperation that could eventually lead to a Comprehensive Economic Partnership Agreement (CEPA) augurs well for the bilateral relations and demonstrates strategic maturity and intent in Canada to insulate the relationship from domestic political turbulence.
This diplomatic reset marks a key follow through from PM Mark Carney's campaign promise to relook at India-Canada ties, signalling a possible pragmatic approach towards India despite opposition from certain quarters in Canada. Canada's long-term geo-economic strategy is evolving, and engagement with India is likely to become a key component of it both bilaterally and as an actor in the Indo-Pacific.
The shifting character of the G7 was perhaps most visible at this year's summit. Its inability to maintain a unified position on Ukraine, evidenced by the retraction of a previously agreed statement, revealed the continued centrality of US support — not just in diplomacy, but also in financial and security commitments. Yet, the presence of India, Brazil, Mexico, and South Africa served as a subtle but powerful signal that the G7 is being compelled to engage with the Global South in new and meaningful ways.
The G7, once a club of like-minded wealthy democracies, is at a crossroads. A dual dynamic of Western recalibration and Southern assertion is defining its current evolution. While internal cohesion among Western nations remains under pressure, a simultaneous embrace of emerging powers is becoming necessary. The road ahead will likely require balancing continued engagement with a less predictable US and deeper integration with economies that are assuming a growing role in global political and economic affairs.
The group's future relevance will depend not only on its ability to maintain unity within but also on its willingness to share space and shape the agenda with rising powers like India. The India-Canada thaw, in this context, is more than a bilateral correction as it signals that rebalancing of Western global economies may not remain just a choice but a necessity.
Harsh V Pant is vice president, Observer Research Foundation (ORF), New Delhi and Vivek Mishra is deputy director, Strategic Studies Programme, fellow, China Studies, ORF. The views expressed are personal.