G7 observer status serves to advance India’s foreign and security policy objectives

The meeting of G7 leaders that concluded in Bavaria was attended by India as an observer.

About G7

The G-7 or ‘Group of Seven’ includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

It is an intergovernmental organisation that was formed in 1975 by the top economies of the time as an informal forum to discuss pressing world issues.

Initially, it was formed as an effort by the US and its allies to discuss economic issues.

The G-7 forum now discusses several challenges such as oil prices and many pressing issues such as financial crises, terrorism, arms control, and drug trafficking.

It does not have a formal constitution or a fixed headquarters. The decisions taken by leaders during annual summits are non-binding.

Canada joined the group in 1976, and the European Union began attending in 1977.

The G7 is trying hard not to be yesterday’s club.

It is still a powerful grouping, with seven of its members in the top 10 economies of the world, three of them permanent members of the UNSC.

Important outcomes of the G7 meeting

Statement on support for Ukraine: A standalone G7 Statement on Support for Ukraine was issued.

There was an unconditional commitment that the grouping will provide financial, humanitarian, military and diplomatic support and stand with Ukraine for as long as it takes.

Russia was also warned that any use of chemical, biological and nuclear weapons would be met with severe consequences.

Further intensification of sanctions against Russia was contemplated.

Tough language on China: Significantly, the G7 final communique has tough language on China as well.

It says there is no legal basis for China’s expansive maritime claims in the South China Sea, it calls on China to press Russia to withdraw troops from Ukraine and expresses grave concern about the country’s human rights situation.

It calls on China to respect universal human rights and fundamental freedoms in both Tibet and Xinjiang, highlighting the issue of forced labour in the latter.

Significance of India’s observer status

The fact is that even the G7 knows its clout has declined compared to, say, 20 years ago.

That explains the move to invite key G20 countries as observers to its summits.

As for India, its importance lies in the undeniable truth that no global problem can be seriously tackled without New Delhi’s involvement.

For India, G7 summits have always been an invaluable opportunity to exchange views not just in a plurilateral format but also in the bilateral meetings on the margins of the main meetings.

2 statements: India has lent its name to two statements issued by the G7. One is titled “Resilient Democracies Statement” and the other is “Joining Forces to Accelerate Clean and Just Transition towards Climate Neutrality”.

The first statement talks of democracies as reliable partners seeking to promote a rules-based international order and supporting democracy worldwide including through electoral assistance.

The other statement to which India is a signatory is the one on clean and just transition towards carbon neutrality.

 PM visits United Arab Emirates (UAE)

PM Modi expressed gratitude to President of the United Arab Emirates Sheikh Mohamed bin Zayed (MBZ) al Nahyan for taking great care of 3.5 million Indian community in the UAE during the pandemic.

India- UAE Relations: A backgrounder

The relation has greatly flourished especially after the accession of H. H. Sheikh Zayed Bin Sultan Al Nahyan, as the ruler of Abu Dhabi in 1966.

The greater push has been achieved in bilateral relations when the visit of Indian PM’s to the UAE in August 2015.

It marked the beginning of a new strategic partnership between the two countries.

Further, the Crown Prince was invited in January 2017 as the chief guest at India’s Republic Day celebrations.

In 2017 the two sides signed the agreement on Comprehensive Strategic Partnership (CSP).

Significance of ties

Indian Diaspora in UAE: Around 3 million Indians are living harmoniously in the UAE.

UAE – A willing partner: As India seeks to enhance economic engagement and deepen security cooperation with the Gulf, it finds a willing partner in the UAE.

India being a natural partner: UAE’s ‘Look East’ find partners for its economic growth and with security concerns emanating from turmoil in West Asia and growing threat from terrorism.

Investments: UAE has a special place due to its business-friendly atmosphere, willingness to invest in the Indian economy.

India’s West Asia policy: The UAE occupies a key place in India’s West Asia policy. The high-level visit from both sides has given a new impetus to this partnership.

Why UAE is tilting toward India?

Turmoil in West Asia: Geopolitical conditions as Iran is threatening continuously to close the Strait of Hormuz in case there is a conflict with Saudi Arabia or US.

Disappointment from Pakistan: UAE saw Pakistan as a partner and incorporated a deep economic and security relationship with it. But in the present day, Pakistan does not seem to be of much help to UAE.

India as a market: India is an important destination for oil and energy purchase. UAE also recognizes exhaustible nature of its fossil fuel reserves.

Returns on investment: UAE’s massive sovereign wealth funds can act as a great resource in the development of infrastructure in India.

Addressing Terrorism: There has been a rising convergence between India and UAE on the terror issue and both the countries talked of the need to combat terror groups without any discrimination.

Lack of regional consensus: Countries like Syria, Iraq, Libya and Yemen are suffering from violent conflicts. The Gulf Cooperation Council (GCC) has not produced expected results.

Economic Significance of the UAE

UAE, due to its strategic location, has emerged as an important economic centre in the world.

In recent years, the UAE, through its ‘Vision 2021’, has sought to diversify its economy and reduce its dependency on oil.

Although the UAE has diversified its economy, the hydrocarbon sector remains very important followed by services and manufacturing.

Within services, financial services, wholesale and retail trade, and real estate and business services are the main contributors.

India-UAE trade and investment ties

India is UAE’s third largest trade partner after China and the United States.

The UAE accounts for 8 percent of India’s oil imports and was fifth largest supplier of crude oil to India.

The aim is to boost bilateral merchandise trade to above U.S.$100 billion and services trade to U.S.$15 billion in five years.

As we are witnessing a big turnaround in manufacturing, the UAE would be an attractive export market for Indian electronics, automobiles, and other engineering products.

The UAE’s investment in India is estimated to be around U.S.$11.67 billion, which makes it the ninth biggest investor in India.

Advanced technology and the knowledge economy

(1) Technology

In 2018, India and UAE signed a MoU to generate an estimated $20 billion in the span of a decade.

The Emirates have stepped up efforts to invest in the development of the knowledge economy by expanding the “golden visa”.

Space is a new arena in which India and the UAE have collaborated through the work of the UAE Space Agency (UAESA) and the Indian Space Research Organization (ISRO).

Space cooperation between India and the UAE gained quick momentum during PM Modi’s visit to the Emirates in 2015.

The two countries are likely to work together on Emirates’ ‘Red planet Mission’.

(2) Security and Defence Cooperation

Another significant pillar of India-UAE ties is reflected in their growing cooperation in security and defense sector.

With the spread of radicalism in Gulf and South Asia, India looks to enhance security cooperation with UAE to counter terrorist threats and combat radicalization.

‘Desert Eagle II’, a ten day air combat exercise, was held between the air forces of India and UAE.

Way Forward

(1) Needs to ensure the execution of the investment projects with the required expertise

Potential areas to enhance bilateral trade include defence trade, food and agricultural products as well as automobiles.

Indian companies with expertise in renewable energy sector can invest in UAE.

In defence sector, there is a need to further enhance cooperation through joint training programmes.

(2) Manifold Benefits of India-UAE Trade Agreements

With India’s newfound strength in exports, a trade agreement with an important country such as the UAEwould help sustain the growth momentum.

As we are witnessing a big turnaround in manufacturing, the UAE would be an attractive export market for Indian electronics, automobiles, and other engineering products.

(3) Improving the relations with the GCC

As part of the GCC, the UAE has strong economic ties with Saudi Arabia, Kuwait, Bahrain, and Oman and shares a common market and customs union with these nations.

This FTA with the UAE will pave the way for India to enter the UAE’s strategic location, and have relatively easy access to the Africa market and its various trade partners.

This can help India to become a part of that supply chain especially in handlooms, handicrafts, textiles and pharma.

(4) Solving the issue of UAE’s Non-Tariff Barriers (NTBs)

The UAE tariff structure is bound with the GCC (applied average tariff rate is 5%), therefore, the scope of addressing Non-Tariff Barriers (NTBs) becomes very important.

The reflection of NTBs can be seen through Non-Tariff Measures (NTMs) mostly covered by Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT).

Commonwealth adopts ‘Living Lands Charter’

All 54 Commonwealth members have agreed to voluntarily dedicate a ‘living land’ in their respective countries to future generations, in line with the strategy set for the UN Decade on Ecosystem Restoration.

Living Lands Charter

The non-binding mandates that member countries will safeguard global land resources and arrest land degradation while acting against climate change, biodiversity loss and sustainable management.

It helps to encapsulate the combined effort to hold the global average temperature increase to 1.5 degrees Celsius, said Commonwealth Secretary-General Patricia Scotland.

The document came after nearly two years of intense consultation, engagement and negotiation with member countries at UN Rio Convention.

Key objectives

Leaders and their representatives noted with concern in the charter the alarming decline in the health and productivity of global land resources.

It aimed to support member countries to effectively deliver their commitments under the three Rio conventions:

UN Convention on Biological Diversity

UN Convention to Combat Desertification (UNCCD)

UN Framework Convention on Climate Change

Major outcomes

The attendees also underlined the principle of “critical guardianship” provided by indigenous peoples and local communities in protecting land and vital ecosystem services.

The agreement was released along with a final wide-ranging communiqué by leaders, including on specific items on climate change.

Country heads underscored in it that the “urgent threat of climate change” exacerbates existing vulnerabilities and presents a significant threat to COVID-19 recovery efforts.