Two key World Trade Organization (WTO) members, India and South Africa have opposed the inclusion of the Investment Facilitation for Development (IFD) proposal in the outcome document of the 13th Ministerial Conference (MC13) that is slated to be concluded on Thursday in Abu Dhabi.
The IFD proposal, which was moved by a group of 123 members led by China, refers to a plan that seeks to improve transparency in investment regulations and make countries more attractive to foreign and national investors.
“Firstly, India argued that the IFD falls outside the scope of the WTO, as it is not strictly a trade issue beyond the scope of the Marrakesh agreement,” a senior government official said, requesting anonymity.
“India also pointed out that the IFD does not fulfil the criteria for a formal agreement as it hasn’t received unanimous support from all WTO members, thus lacking the exclusive consensus required,” the official said.
The official added that the China-led group wants to bring the proposal through Annexure-4 of the WTO, under which the proposal would be binding for signatory members and not for those who oppose it.
India’s consistent stance highlights its concerns surrounding the agreement’s potential impact, which led it to oppose the inclusion of the IFD proposal in the MC13 outcome document, the senior government official said.
The IFD initiative was officially launched in 2017 by a group of developing and least-developed WTO members with a mandate to streamline investment procedures and facilitate cross-border investments.
However, it has attracted criticism for potentially favouring countries heavily reliant on Chinese investments and those with sovereign wealth funds.
India raised several concerns regarding the IFD agreement, the official mentioned above said.
India had earlier blocked an IFD proposal at the WTO’s general council meeting in December 2023.
