India's Structural Position Has Changed Faster Than Markets Have Repriced It
India's GDP is now $4.15 trillion nominal and $18.9 trillion PPP, with 6.5% growth projected for 2026 and a DFS Secretary who described the country in February as the second-largest contributor to global growth after China. The EY India analysis showing BRICS+ poised to surpass G7 in global merchandise trade share in 2026 contextualizes what this means structurally: the trade architecture that the G7 summit is designed to coordinate is operating on assumptions about which economies dominate global commerce that are no longer accurate. India's agriculture sector grew 10% and its MSMEs grew 17% in 2025, supported by government guarantee schemes. Taiwanese firms accelerating FDI into India — more than $665 million in the five years to 2023 versus $277 million in the prior decade — represent a supply chain shift that is permanent, not reactive. The Finland-India Strategic Partnership on Digitalization and Sustainability signed March 5, the India-Japan CEPA progress meeting in Tokyo on March 2, and India's active pursuit of EU and UK free trade agreements all signal a foreign economic policy that is systematically building the trade relationships that the G7 framework historically managed. India is not waiting for an invitation to the table. It is building an alternative table at the same time it accepts invitations to the existing one.
The supply chain implications of India's growth trajectory are being underpriced in sectors where the substitution of China-based production for India-based production is proceeding but not yet reflected in equity valuations. Electronics manufacturing, pharmaceuticals — where India produces approximately 20% of global generic drug volume and is actively expanding API manufacturing capacity — specialty chemicals, and defense components are the four categories where the India supply chain buildout is most commercially advanced and most consequential for global market structure. The Taiwanese FDI surge into Indian electronics manufacturing specifically addresses the semiconductor packaging and assembly capacity that Western supply chain diversification strategies require but that India's domestic capabilities had not historically provided. As that capacity comes online through 2026 and 2027, the cost and reliability assumptions that currently make Chinese electronics supply chains dominant in mid-tier complexity categories will shift — not dramatically in a single quarter, but persistently across multiple product generations in a way that creates durable competitive advantage for companies that established Indian manufacturing relationships early.
The G7 Agenda Items Are Not Separable — That Is the Problem
The three G7 agenda items — energy security given the Strait of Hormuz disruption, global trade architecture given tariff proliferation and the BRICS+ trade share shift, and climate and sustainable development — are being treated as parallel agenda items when they are structurally interconnected in ways that prevent resolution of any one without addressing the others. The Strait of Hormuz disruption increases energy costs for every economy, but it increases them most for energy-importing developing economies — which are disproportionately represented in the BRICS+ grouping and which are the growth markets that both G7 and BRICS+ members are competing to supply. Higher energy costs in India, Bangladesh, Indonesia, and Brazil compress their manufacturing cost advantages and slow the supply chain diversification that Western multinationals are counting on to reduce China exposure. The G7 cannot address supply chain resilience without addressing energy access for the economies into which supply chains are being diversified — and addressing energy access requires coordination with the OPEC+ producers and Iranian nuclear diplomacy that the G7 format is not designed to deliver.
The tariff architecture piece is equally entangled. The Section 122 authority expiring July 23 creates a decision point that will arrive eight days after the G7 summit closes. If the summit produces a multilateral trade framework that reduces the pressure on the U.S. to maintain unilateral tariffs — through a coordinated allied approach to China trade practices, for example — the administration has political cover to let Section 122 lapse without replacing it with a new IEEPA-based mechanism. If the summit fails to produce that framework, the domestic political pressure to maintain tariff protection for manufacturing sectors that have made reshoring investments based on tariff assumptions will push toward a replacement tariff mechanism. Investors in capital-intensive domestic manufacturing positions — semiconductors, pharmaceuticals, battery production, defense electronics — are watching the G7 outcome as a leading indicator for the post-July 23 tariff environment, whether or not they are framing it in those terms explicitly.