L’aquila, July 9 (ANI): US president Barack Obama and Indian Prime Minister Manmohan Singh cozied up to each other at a summit of the G8-G5 groupings at L’Aquila in Italy on Thursday.

Leaders of the world’s richest nations and major developing powers would have on the table raging issues like global warming and international trade, with the poorer countries seeking concessions.

US President Barack Obama would chair the climate discussions, but hopes of agreeing ambitious goals have faded after China and India rejected demands to halve the emissions of greenhouse gases by 2050.

The talks come on the second of a three-day Group of Eight summit, with discussions broadened to include the heads of new economic powerhouses in recognition that the world’s problems cannot no longer be dealt with by an elite few.

The fragile state of the global economy dominated the first day of the annual G8 summit, with the United States, Japan, Germany, France, Britain, Italy, Canada and Russia acknowledging that were still significant risks to financial stability.

The 17-member Major Economies Forum (MEF), which groups the G8 plus big developing nations, also looks set to embrace the two Celsius goal on Thursday, but is balking at further commitments ahead of a decisive U.N. climate conference in December.

Progress could be hampered by the absence of Chinese President Hu Jintao, who withdrew from talks to attend to ethnic clashes in China’s northwest that have killed 156 people and wounded over a thousand.

Indian negotiators said developing countries first wanted to see rich nation plans to provide financing to help them cope with ever more floods, heatwaves, storms and rising sea levels.

Broader economic concerns are also high on the agenda, with emerging nations complaining that they are suffering heavily from a crisis that was not of their making.

China, India and Brazil have all questioned whether the world should start seeking a new global reserve currency as an alternative to the dollar. They have said they may raise this on Thursday after having discussed it amongst themselves on Wednesday (July 08).

The debate is highly sensitive in financial markets, which are wary of risks to U.S. asset values, and the issue is unlikely to progress very far in L’Aquila.

However, a breakthrough on trade may be within reach. Diplomats say the G8 and G5 should agree to conclude the stalled Doha round of trade talks in 2010. Launched in 2001 to help poor countries prosper, they have stumbled on proposed tariff and subsidy cuts. (ANI)