In a recent development, India has opposed the Investment Facilitation Development Agreement (IFD) led by China in the World Trade Organization (WTO). This move suggests that the IFD proposal is unlikely to find a place in the final outcome document of the ministerial conference.
According to official sources, "India and South Africa blocked the IFD proposal in WTO. It may not be mentioned in the final outcome document."
India, along with South Africa, took a stand against the China-led initiative during the working group meeting on development. The 123-member group, spearheaded by China, aimed to push the IFD proposal forward.
Non-Trade Issue: India believes that the IFD, which is primarily backed by countries involved in the Belt and Road Initiative (BRI), is not a trade-related issue and should not be discussed within the WTO framework.
Concerns over Annexure 4: The IFD proponents aim to bring the proposal through Annexure 4 of the WTO, which allows for plurilateral agreements binding only on signatory members. India, however, is concerned about the potential misuse of Annexure 4 for non-trade issues.
Transparency and Inclusivity: India has previously raised concerns about the lack of transparency and inclusivity in the development of the IFD proposal.
Launched in 2017 by a group of developing and least-developed WTO members, the IFD initiative aims to create a global agreement on facilitating investments and improving the business environment for all sectors.
Proponents argue that the IFD would streamline investment procedures, reduce red tape, and promote economic development.
India had consistently regarded IFD as a non-trade issue within the WTO framework. The agreement primarily involves Belt and Road Initiative (BRI) countries and is perceived by India as driven by vested interests.
IFD, falling under Annexure 4 of the WTO, deals with plurilateral agreements. The Investment Facilitation for Development Initiative was launched in 2017 by a group of developing and least-developed WTO members. Its objective is to establish a global agreement to enhance the investment and business climate, making it more conducive for investors across various economic sectors.
India has categorically labeled the IFD proposal, supported by China, as a non-trade issue. The WTO, on the other hand, reported that ministers representing 123 WTO members finalized the IFD Agreement on February 25 through a Joint Ministerial Declaration, which is now accessible to the public.
"India believes the WTO should deal with issues related to trade, and this (IFD) is a non-trade issue," emphasized an official source.
The China-led group is pushing to introduce the proposal through Annexure 4, implying that it would be binding only on signatory members and not on those opposed to it.
The blocking of the IFD proposal by India and South Africa casts doubt on its future within the WTO.
It remains to be seen whether the proponents will seek to revise and resubmit the proposal or pursue other avenues for its implementation.