India and South Africa Block China-Led Investment Facilitation Development Agreement at WTO

India, alongside South Africa, has thwarted the China-led Investment Facilitation Development Agreement (IFD) in the World Trade Organization (WTO), indicating that the proposal is unlikely to be mentioned in the final outcome document of the ministerial conference.

The 123-member group led by China sought to advance a proposal during the working group meeting on development. However, India maintained its stance, considering IFD as a non-trade issue within the WTO forum.

Official sources revealed that IFD, an agreement among Belt and Road Initiative (BRI) countries, is perceived to be driven by vested interests. The proposal falls under Annexure 4 of the WTO, which pertains to plurilateral agreements.

According to the WTO, the Investment Facilitation for Development (IFD) Initiative, launched in 2017 by a coalition of developing and least-developed WTO members, aims to create a global agreement on IFD to enhance the investment and business environment, facilitating easier investor activities across various sectors.

However, India views investment facilitation as a development proposal championed by China, asserting its stance that the WTO should focus solely on trade-related issues.

Ministers representing 123 WTO members released a Joint Ministerial Declaration on February 25, marking the finalization of the IFD Agreement. Nevertheless, India’s objection underscores its belief that issues like IFD should not fall under the purview of the WTO as they are non-trade matters.

The IFD proposal, if advanced through Annexure 4 of the WTO, would bind only signatory members, excluding those in opposition. India’s resistance aligns with its principle that the WTO should remain focused on matters directly related to trade.