G7 Summit 2025: A Strategic Accelerator for India’s USD 248 Billion Trade Engagement with G7 Nations

India’s growing influence in global trade is becoming increasingly evident, particularly in its relations with G7 nations. As reported by SMEStreet in collaboration with Rubix Data Sciences, India’s trade with G7 nations touched USD 248 billion in FY25, reflecting a 13 percent compound annual growth rate (CAGR) from FY21.

The recently concluded G7 Summit 2025 in Apulia, Italy becomes especially significant in this context. With Prime Minister Narendra Modi’s participation as a guest invitee, the summit opened fresh opportunities for India to reinforce its role as a reliable and future-ready trade partner for the world’s most advanced economies.

India Grows Stronger in G7 Trade Landscape

India’s bilateral trade with the G7 nations—namely the United States, United Kingdom, Germany, France, Japan, Italy, and Canada—has been driven by high-value exports across sectors. According to Rubix Data Sciences, in FY25:

• Exports to G7 nations stood at USD 138 billion

• Imports were valued at USD 110 billion

• Resulting in a trade surplus of USD 28 billion

Key Export Segments Driving Growth:

• Telecom equipment, especially smartphones, led the surge, with USD 24 billion in mobile device exports

• Pharmaceuticals, which meet 40 percent of the US generics demand and 25 percent of the UK’s medicine requirements

• Industrial machinery, chemical products, and apparel continued to be strong contributors

India’s rapidly maturing export ecosystem is positioning it as a dependable global manufacturing and digital partner.

G7 Summit 2025: Strategic Signals for India

The G7 Summit of 2025 focused on four core themes: Global Economic Stability, Responsible AI, Energy Security, and Infrastructure Financing. India’s engagement in these discussions comes at a crucial time for its export and policy priorities.

Strengthening Economic Diplomacy

PM Modi’s presence and dialogues with leaders of the US, UK, Germany, and Italy helped reinvigorate trade momentum. Of particular significance:

• The UK-India Free Trade Agreement discussions, already advanced, gained fresh traction.

• Talks with Canada hint at improved bilateral terms after previous diplomatic tensions.

• G7’s collective support for infrastructure development offers India new opportunities for inward investments via the Partnership for Global Infrastructure and Investment (PGII).

India and G7: Emerging Areas of Collaboration

1. Digital Trade and AI Governance

India, with its proven success in Digital Public Infrastructure (DPI) like UPI, Aadhaar, and ONDC, is fast emerging as a global voice in responsible tech. G7 leaders acknowledged the need to align on digital standards and governance, opening doors for:

• Joint development on AI tools and regulatory frameworks

• Expansion of DPI to other developing nations through India-led initiatives

2. Energy and Climate Tech

India’s emphasis on green energy and climate resilience echoed well with the G7’s global climate financing goals. Strategic collaborations are expected in:

• Green hydrogen, EV components, and solar technologies

• Climate-friendly manufacturing and sustainable supply chain practices

3. High-Tech Manufacturing and Pharma

India’s growing role in semiconductors, medical devices, and APIs presents a compelling case for FDI from G7 economies. G7 nations expressed openness to:

• De-risking supply chains by sourcing from Indian MSMEs

• Supporting capacity-building in India’s sunrise sectors

India’s Trade Strategy Post-G7 Summit

Driving FTAs with G7 Members

The G7 Summit reinforced India’s commitment to bilateral and multilateral trade engagements. The UK-India FTA, now in its final stages, may serve as a template for further deals with countries like France, Germany, and Canada.

“With India’s exports to the G7 showing strong growth across sectors like telecom and pharma, formalising trade agreements will only accelerate our economic integration with these nations,” said senior SMEStreet policy observer working in the pharma industry. 

Leveraging PGII and IMEC

G7’s PGII and India’s leadership in the India-Middle East-Europe Corridor (IMEC) are complementary. These initiatives are expected to:

• Improve logistical infrastructure and trade routes

• Attract development capital for Indian port, rail, and digital connectivity projects

Implications for Indian MSMEs

For Indian MSMEs, the outcomes of the G7 Summit and increased trade alignment with these countries offer several advantages:

• New export markets in Europe and North America for high-quality, certified products

• Increased FDI and technology transfer, especially in sectors like electronics, healthcare, and green energy

• Faster trade facilitation and regulatory alignment through FTAs

“The MSME sector is becoming the frontline of India’s global supply chain positioning. G7 partnerships will empower small enterprises to scale internationally,” noted Faiz Askari, Founder of SMEStreet.

Strategic Recommendations for Policymakers

1. Fast-track pending FTAs, especially with UK and EU members

2. Set up G7-focused export promotion zones to streamline certifications and logistics

3. Expand support to MSMEs for global compliance and branding

4. Enhance digital cooperation with G7 on cyber policy and digital commerce platforms

5. Promote India as a tech-manufacturing hub in G7-led supply chain diversification