By Staff Reporter
GENEVA, Dec. 11 — The China-led Investment Facilitation for Development (IFD) agreement has garnered the backing of 128 World Trade Organization (WTO) member countries. However, India, along with South Africa, Namibia, and Turkey, has firmly opposed the initiative, citing its potential to compromise the policy autonomy of weaker nations. A senior Indian government official confirmed this stance on Tuesday, ahead of the WTO General Council meeting scheduled for December 16-17 in Geneva.
This development coincides with a global realignment of investment flows. With rising tensions from a potential US-China trade war and declining consumer demand in China, investors are increasingly redirecting their capital to ASEAN countries. Meanwhile, Chinese firms are expanding their overseas assets to unprecedented levels, further influencing global investment trends.
“There is tremendous pressure and momentum from China. They have secured support from 128 of the 166 WTO members, including Pakistan. Four nations—India, South Africa, Namibia, and Turkey—stand opposed. The US has chosen to remain neutral and stay out of the agreement,” the official stated. Interestingly, Pakistan, initially a non-supporter, has since aligned itself with the IFD.
India has expressed reservations about the IFD, with officials suggesting that many supporting nations may be under a misconception regarding its potential benefits. “For developing countries, this agreement risks constraining their policy space. While additional members may eventually join, India’s position remains unchanged,” the official emphasized.
The IFD aims to enhance the global investment landscape by fostering international cooperation and facilitating foreign direct investment (FDI) flows among WTO members. A WTO note highlights that the agreement is particularly designed to benefit developing and least-developed countries.
Proposed in 2017 by China and other economies heavily reliant on Chinese investments, the agreement enjoys strong support from nations with significant sovereign wealth funds. However, critics argue that the IFD could undermine India’s economic interests and curtail its regulatory flexibility on FDI policies.
In a parallel discussion, India has championed the adoption of a “per capita distribution of subsidies” framework to address overfishing and overcapacity concerns within the WTO. Highlighting disparities, Indian officials pointed out that the country’s annual fisheries subsidy is just $35 per fisher, in stark contrast to the $76,000 provided by some European nations.
To bolster its argument, India has submitted a detailed document titled Designing Disciplines for the Overcapacity and Overfishing Pillar: A Case for Intensity-Based Subsidies Approach. This proposal will also be reviewed during the WTO General Council meeting in Geneva.
WTO negotiations have focused on disciplining subsidies that contribute to overfishing and overcapacity. In 2022, member nations reached an agreement to curb subsidies for illegal, unreported, and unregulated fishing. India asserts that a per capita approach would ensure fairness and accurately address sustainability and livelihood concerns.
“Aggregate fisheries subsidies fail to differentiate between subsistence support, which sustains livelihoods, and subsidies that drive overcapacity or overfishing. A per capita criterion would be a more equitable measure, reflecting the actual needs and practices of individual nations,” India stated in its submission.
