G-7 DEVELOPMENT PLAN-INDIA
The G-7 grouping of the world’s most industrialized nations –Canada, France, Germany, Italy, U.K., Japan and the U.S.along with the European Union-launched a U.S.led dollar 600 Partnership for Global Infrastructure and Investment(PGII) at their summit in Germany’s Schloss Elmau, where India was among Five special invitees
Key Points
- The initiative was billed as a values-driven, high-impact, and transparent infrastructure partnership to meet the enormous infrastructure needs of low and middle-income countries and support the U.S. and its allies' economic and national security interests.
- PGII Would offer counter to china’s Belt and Road Initiative.
- Mr Kwatra’s Foreign Secretary's response Indicates that India was not privy to PGII consultations, nor was the infrastructure plan part of the documents that were signed by India, Indonesia, South Africa, Senegal, and Argentina, who were part of the G-7 outreach invitees to the summit
IS THERE ANY SPECIFIC ROLE FOR INDIA
- According to U.S officials, the PGII will have four key priorities on infrastructure, climate and energy security, digital connectivity, health and health security, and gender equality and equity, all of which are priority areas for New Delhi as well.
- The PGII factsheet released by the White House also includes a specific plan for investment in an Agritech and climate sustainability fund that would invest in the companies that increase food security and promote both climate resilience and climate adaptation in India, as well as improve the profitability and agriculture productivity of smallholder farms.
- According to the documents, the India fund would target a dollar 65 million by September 2022 and a target capitalization of a dollar 130 million in 2023.
WHAT COULD BE SOME OF THE REASONS FOR INDIA’S RETICENCE ON PGII?
- One reason for some scepticism in New Delhi is that the PGII is one of a number of U.S.-led economic initiatives announced globally and in the Indo-Pacific without much clarity on whether they would overlap, or run concurrently with each other.
- The PGII announcement for dollar 600 billion over five years also comes a year after the U.S. led a G-7 initiative to counter china’s strategic competition and to narrow the rough dollar 40 trillion infrastructure gap in the developing world
- Last year, the Biden administration also revived a Trump administration project for the Blue Dot Network Initiative to certify infrastructure projects but had stopped short of funding them.
- Another reason for Indian reaction could be to show consistency given India’s earlier reaction to the BRI, India’s initial response was also that this was a plan with geopolitical consequences that India had not been consulted on
- It is possible that the Modi government’s cautiousness on PGII is about striking a balance.
