India Opposes China-Led WTO Investment Pact

• 23 Oct 2025

Source: ET

Why in News? 

India raised concerns at the World Trade Organization (WTO) over the China-led Investment Facilitation for Development Agreement citing systemic, legal, and procedural implications.

What is the Investment Facilitation for Development Agreement? 

• About: It is a plurilateral WTO initiative to streamline bureaucratic procedures and enhance the transparency of investment rules to make it easier to attract global Foreign Direct Investment (FDI). It focuses on administrative reforms and cooperation. 
  • The core aim is to create legally binding provisions to facilitate and increase the flow of Foreign Direct Investment (FDI), especially to developing and least-developed countries, to foster sustainable development. 
  • It has gathered support from 127 WTO members, including 90 developing economies and 27 LDCs, representing three-quarters of membership and highlighting its relevance for the Global South. 
• Key Features: 
  • Plurilateral Agreement: It is proposed as a plurilateral agreement, binding only on members who accept it, and will be included in Annex 4 (Plurilateral Trade Agreements) of the Marrakesh Agreement 1994. 
  • Most-Favoured-Nation (MFN) Treatment: Any concession given to one investor from a signatory country must be extended to all other signatories. 
  • Open for Accession: Any WTO member can join the agreement. 
• India's Objections: India argues that the investment facilitation is a "non-mandated, non-multilateral issue" and its inclusion within the WTO framework undermines the organisation’s established mandate.  
  • India views this plurilateral push as a threat to the consensus-based, member-driven nature of the organization, allowing groups to bypass broader membership agreement. 

What are the Other Key WTO Agreements?  

• General Agreement on Tariffs and Trade (GATT) 
• General Agreement on Trade in Services (GATS) 
• Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) 
• Agreement on Agriculture (AoA) 
• Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) 
• Agreement on Technical Barriers to Trade (TBT) 
• Agreement on Trade-Related Investment Measures (TRIMs) 
• Agreement on Subsidies and Countervailing Measures (ASCM)

Note: India is a founding member of the WTO (1995) and a signatory to all its multilateral agreements listed above. However, it opposes non-mandated plurilateral agreements, such as the Investment Facilitation for Development (IFD) proposal.

India's WTO Priorities 

• India's stance is part of a larger strategic position to protect its policy space and prioritize longstanding development issues: 
  • India insists that the WTO must first address unresolved issues from the Doha Development Agenda, especially in agriculture (e.g., permanent solution for public stockholding, special safeguard mechanism). 
  • India stresses that any reform must restore a fully functional dispute settlement system and preserve the principle of Special and Differential Treatment for developing countries. 

Frequently Asked Questions (FAQs)

1. What is the Investment Facilitation for Development (IFD) Agreement? 
A proposed WTO treaty to establish a pre-investment review and appeal system via an independent body to facilitate global investment. 

2. What are the main objectives of the IFD Agreement? 
To enhance the investment climate, simplify investor operations, and promote FDI, especially to developing and least-developed countries. 

3. Why has India opposed the IFD Agreement at the WTO? 
India views it as a non-mandated, non-multilateral issue that violates consensus-based decision-making and threatens developing countries’ policy space. 

UPSC Civil Services Examination, Previous Year Questions (PYQs)

Q1. The terms ‘Agreement on Agriculture’, ‘Agreement on the Application of Sanitary and Phytosanitary Measures’ and ‘Peace Clause’ appear in the news frequently in the context of the affairs of the (2015)  

(a) Food and Agriculture Organization  

(b) United Nations Framework Conference on Climate Change  

(c) World Trade Organization  

(d) United Nations Environment Programme  

Ans: (c)

Q2. In the context of which of the following do you sometimes find the terms ‘amber box, blue box and green box’ in the news? (2016)  

(a) WTO affairs  

(b) SAARC affairs  

(c) UNFCCC affairs  

(d) India-EU negotiations on FTA 

Ans: (a)