At the conclusion of the G7 Summit held in Puglia, Italy from June 13-15, 2024, leaders of the G7 member nations—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, with the European Union as a non-enumerated member—issued a joint statement announcing stringent sanctions on China. The sanctions target countries that in any way lend support to Russia’s military efforts in its ongoing conflict.
The G7 statement emphasized the implementation of “restrictive measures to prevent abuse and restrict access to our financial systems.” It also addressed China’s alleged unfair economic practices. In a significant gesture of support, the G7 leaders pledged USD 50 billion to aid Ukraine. Italian Prime Minister Georgia Meloni, who hosted this year’s summit, confirmed, “We have reached a political agreement to provide additional financial support to Ukraine of approximately USD 50 billion by the end of the year.”
Interestingly, the G7 Summit also saw participation from several non-member countries. Among these were India, Brazil, and the UAE—nations that are part of the BRICS+ grouping led by China. Should Saudi Arabia join BRICS, the coalition would command over 40% of global oil production and 35% of total oil consumption.
Just days before the G7 Summit, BRICS foreign ministers convened in Nizhny Novgorod, Russia, to discuss ways to advance de-dollarization—aiming to reduce global reliance on the US dollar for international trade. On June 8, 2024, Saudi Arabia declined to renew its 50-year-old petrodollar agreement with the US, enabling it to sell oil in currencies other than the US dollar, such as the Chinese RMB, Euros, and Yen. Although Saudi Arabia maintains strong ties with the US, its economic relationship with China has notably strengthened in recent years. Like many countries, Saudi Arabia has been keen to diminish its dependence on the US dollar, propelled by stringent US sanctions against Russia and Iran. This shift has led to a noticeable increase in non-dollar trade in commodities, with India actively promoting trade in local currencies.
Given the current geopolitical and economic landscape, Global South countries find it imperative to adopt foreign policy positions that do not compromise their national interests. A salient example is India’s decision to purchase Russian oil at discounted rates following the Russia-Ukraine war.
. Initially, this move was not well-received by the US, though US Ambassador to India, Eric Garcetti, later stated that Washington understood New Delhi’s rationale.
Speaking at a G20 outreach event, Indian Prime Minister Narendra Modi remarked, “India has considered it its responsibility to put priorities and concerns of countries of the Global South on the world stage.” He lauded the African Union’s elevation to a permanent member of the G20 during India’s presidency.
Ahead of the G7 Summit, PM Modi had expressed his intention to highlight the issues of the Global South. Arriving on June 14, Modi participated in the G7’s outreach session, which focused on Africa and Artificial Intelligence (AI).
The evolving geopolitical situation indicates that even countries closely allied with the West, especially the US, are seeking to realign their foreign policies. While it’s premature to assert a decline in US influence or its currency, today’s world is undeniably more complex. Nations are diversifying their economic partnerships and reducing their reliance on the US, driven by the shifting geopolitical and economic environment.
India’s potential role as a bridge between the G7 nations and the Global South is significant. This was evident from PM Modi’s address at the G7 outreach event and other international platforms. Additionally, upcoming elections in several G7 countries could lead to new governments, potentially influencing the organization significantly.
Despite efforts to appear considerate of the Global South’s concerns, the G7 must take tangible actions to address these issues. Moreover, viewing the Global South as a monolith is no longer viable. Although there may be common ground on various issues, stark differences in foreign policy orientations among these nations must be acknowledged.
In conclusion, while the geopolitical and economic landscapes are increasingly intricate, countries of the Global South and even traditional Western allies are exploring ways to diversify and adapt their foreign policies in response to the emerging global order.
