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As per the WTO website, the IFD Agreement provides global benchmarks to support the efforts of member countries who are parties to the agreement to improve the investment and business climate and aims to make it easier for investors in all sectors of the economy to invest, conduct their day-to-day business and expand their operations.
However, India is of the view that instead of being beneficial to poor nations, IFD may undermine their policy autonomy in case they lack adequate capacity to protect their institutions from being taken over by other countries.
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Government sources have told CNBC-TV18 that a tremendous amount of pressure has been generated by China in favour of IFD by getting several countries to support the proposal, with Pakistan being the latest country to have extended support in the last General Council (GC).
While the United States isn’t ready to join any such plurilateral agreement but hasn’t opposed IFD, only India, South Africa, Namibia and Türkiye are opposing the initiative.
Stating that investment isn’t a part of trade and hence can’t form part of trade negotiations, India has claimed that it can’t be adopted by the WTO unless there is an exclusive consensus on the issue.
Government sources said that India has also conducted bilateral talks with Indonesia citing the latter’s own paper where it had pointed out problems with IFD.
Terming trade protectionism in the garb of sustainability as untenable under WTO/GATT norms, government sources indicated that many countries may be opposed to the carbon tax due to dependence on conventional sources of energy but are yet to articulate their objections.
At the WTO’s 13th Ministerial Conference in Abu Dhabi earlier this year, India clarified its position against the inclusion of IFD as a part of the WTO mandate and submitted written objections to the WTO Secretariat.
India’s Commerce and Industry Minister Piyush Goyal said issues outside the mandate of the WTO shouldn’t be brought in and should be looked after by their respective bodies.
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India had also urged the multilateral trade body to work on building global trust in its functions by implementing its long-standing mandates and ensuring compliance by reviving its now-defunct dispute resolution mechanism.
