The G7 summit concluded Tuesday in Kananaskis, Canada, without unified agreements on several pressing global issues, following US President Donald Trump's unexpected early departure owing to developments in the Middle East.

A Fractured Summit and India's Calculated Engagement

In the run up to the summit, there was much anticipation in the Indian media about the absence of an invite to Prime Minister Modi and the perceived down gradation of India's status or failure of Indian diplomacy since Operation Sindoor. When the invite eventually arrived, again there was media frenzy about whether the Prime Minister should be attending the summit at all. The Prime Minister embarked on the trip ending all speculation. An opportunity to huddle with leaders of some of the most powerful western nations alongside the EU President and the UNSG apart from an opportunity to begin a reset in ties with Canada, must have been uppermost in his mind.

At its peak in 2000, the G7 accounted for a staggering 40 per cent of the global GDP while being home to only 10 per cent of the world population; now it contributes less than 30 per cent and pales behind BRICS.

The G7's Diminishing Clout

Notwithstanding the optics of grandeur however, the relevance of the G7 and its pretentions of being the arbiters of global affairs are under serious scanner. It may be early to write an obituary for the most powerful and most consequential block that has virtually set the agenda for rest of the world for over five decades since its emergence in early seventies. The G7 including the US, Canada, France, Germany, Italy, Japan, the UK, traces its roots back to informal discussions among finance ministers in the 1970s. It was initially established as a response to the oil crisis and aimed to coordinate economic policies among major Western industrialised nations. Over time, the G7 expanded its agenda to include political, security, and environmental issues. At its peak in 2000, it accounted for a staggering 40 per cent of the global GDP while being home to only 10 per cent of world population. It has been a downhill since, the slide more precipitous since the outbreak of the war in Ukraine in February 2022. Now it contributes less than 30 per cent of global output but more significantly pales behind the BRICS which controls 35 per cent of GDP.

Fractures Within and Failures Abroad

In geopolitical terms, the cohesion earlier exhibited in G7 has more or less evaporated, especially since Trump came to occupy the American Presidency in January this year. The sharp differences are best reflected in the US led NATO which has all the G7 countries except Japan as member countries over backing Ukraine in its war with Russia. The Trump administration has effectively ended its support to Ukraine while the European countries especially the UK, France and Germany have tried to flex their combined military muscle to declare unwavering support, only to realise that without the US, the rest combined don't count much, if anything at all.

The Trump administration has effectively ended its support to Ukraine, while the European countries have tried to declare unwavering support-only to realise that without the US, they don't count much.

In similar vein, the situation in the Middle East has evoked differences. While European partners are baying for immediate ceasefire in Gaza and calling for a cessation of hostilities between Iran and Israel though affirming the latter's right to defend itself, President Trump has different views. So, while President Trump had initially signed on to a brief joint statement with other G7 leaders declaring that "Iran can never have a nuclear weapon" and calling for de-escalation in Gaza, however, more substantive agreements, particularly on Ukraine were derailed. President Trump did not agree on blaming Russia for the invasion and that's where there are diametrically opposite views.

Domestic Crises and the Rise of Alternatives

Domestically, each of the G7 country faces challenges that seem to upend their exalted status in the international arena. The possibility of the Sharia replacing the Magna Carta in near future in the UK is not too far-fetched given the overwhelming internal turmoil, protests and counter protests fuelled by significant demographic changes. There is serious disaffection in Germany with the mainstream parties due to their entanglement with the war in Ukraine that has left the country's industries in tatters with rising energy costs, resultant mass lay-offs and high inflation. The nationalist Alternative for Deutschland (AfD) has emerged as the second largest political force that promises to radically reorient Germany's geopolitical alignments if it wins power. This holds true for France as well where the Marine Le Pen led National Rally (RN) has swept the European Parliament elections last summer only to be banned from contesting for five years by the courts on flimsy embezzlement charges. France faces rising immigrant fuelled public disturbances and violence apart from serious challenges to its neo-colonial exploitative and extractive arrangements with former colonies in Africa, the resistance now led by Burkina Faso's President Ibrahim Traoré.

Each of the G7 countries faces domestic challenges that seem to upend their exalted status in the international arena.

It hasn't helped that Trump had earlier derisively labelled G7 host Canada as its 51st state in testy Truth Social postings after meeting with former Prime Minister Justine Trudeau. Tariff wars with Canada as well as the EU as a block have caused erosion of trust in this whites-only club. Then there is Trump's quest to acquire Greenland. French President Macron made it a point to visit Greenland before the G7 summit to drive home his solidarity with Denmark's sovereignty over Greenland. Keeping a watch on the snub score card, Trump called out Macron as publicity seeking and lacking understanding of geopolitical developments in the Middle East even as he hurriedly exited the summit venue a day earlier than scheduled. That also meant no meetings with Ukraine's Zelensky who also returned early hugely disappointed. As a consequence, there was no comprehensive joint communique, in the hopes of avoiding a further divide among members.

The US itself is battling on many fronts including tariff wars with rest of the world disrupting global supply chains, mounting debt exceeding $37 trillion with US treasury bonds losing their safe-haven status and a deeply divisive war on migrants. US Marines soldiers and National Guards troopers alongside ICE agents and DHS officers are fighting bruising street battles with undocumented immigrants as cars are set ablaze, showrooms looted and there is the spectacle of a state governor suing the President in the courts. This will have compounding effect, shutting down agriculture activities and businesses like food processing. The collapse of immigration will have broader implications in financial markets, including for the dollar, which has already been battered by Trump's aggressive tariff campaign.

The BRICS, which represents almost 42 per cent of the world's population, have devised their own payment systems bypassing SWIFT and structured trade outside the US dollar.

Conclusion

The G7 leaders may still display swagger in front of the cameras, but the fear of lapsing into irrelevance is very real. Moreover, the biggest challenge to the hitherto unchallenged sway of the Petrodollar is not emanating from any single country but from a collective. The BRICS that represent almost 42 per cent of the world's population have devised their own payment system bypassing the SWIFT and devised bilateral and multilateral trade arrangements bypassing US Dollar, hedging against threats of western sanctions. Should the US land in a situation worse than the depression of 1930s as many economists and geopolitical observers foresee, the G7 may have had its swansong.