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India and South Africa have effectively blocked a significant proposal led by China at the World Trade Organisation (WTO) conference. The proposal, known as the Investment Facilitation Development Agreement (IFD), is now unlikely to be incorporated into the final outcome document of the ongoing ministerial conference.
India raised several concerns regarding the IFD. Firstly, it argued that the agreement falls outside the WTO’s scope as it pertains to investment, which is beyond the mandate of the Marrakesh agreement. Additionally, India pointed out that the IFD lacks the unanimous support of all WTO members, thus failing to meet the criteria for a formal agreement.
This is not the first time India has opposed the IFD; it previously blocked the proposal in December 2023 and at the WTO’s General Council Meeting. India’s consistent stance reflects its concerns about the potential impact of the agreement.
The IFD, proposed in 2017, aims to simplify investment procedures and promote cross-border investments. However, it has faced criticism for potentially favoring countries heavily reliant on Chinese investments and those with sovereign wealth funds.
With India and South Africa’s objection, the IFD is unlikely to be adopted by the WTO in its current form. This development may trigger further discussions and potential revisions to the agreement or its complete abandonment.