India is opposed to a proposal on investment facilitation led by China and supported by 128 countries, which is currently being pushed at the World Trade Organization (WTO), a senior government official said on Tuesday.
The proposal, known as the Investment Facilitation for Development (IFD), is being championed by China and a group of nations that rely heavily on Chinese investments. While the proposal would be binding only for signatory members, India has expressed its strong opposition to it.
"We are opposing this. It is a pluri-lateral agreement and it is also not a trade agreement," the official stated.
India plans to submit formal objections to the WTO regarding the proposal, arguing that such agreements would undermine the multilateral nature of the Geneva-based organisation. The IFD proposal was first introduced in 2017 by China and its allies, including countries with sovereign wealth funds, but notable global powers such as the United States are not participating in the agreement.
The WTO is responsible for setting global trade rules, ensuring trade flows smoothly, predictably, and freely between nations.
When asked about new issues being pushed by developed countries, such as sustainability, the official responded: "We want to first settle the mandated issues, and new matters will be discussed later."
India is particularly focused on securing a permanent solution to the long-standing issue of public stockholding for food security, a matter that has been unresolved for over two decades.
"India is not going to compromise on food security and livelihood issues of its farmers," the official emphasised, adding that the country's support measures for farmers are critical to their sustenance. In contrast, production-based support measures distort global trade.
India currently provides a subsidy of USD 465 per farmer, compared to USD 81,000 per farmer in the United States for the 2022-23 period.
"Going forward, if at all any decision will have to come on agriculture, then the first thing that will be done is our permanent solution to public stock-holding, otherwise we will not allow any other decision in the agriculture sector," the official asserted, calling it a "big red line" that is non-negotiable.
On the European Union's (EU) proposed carbon tax, the official confirmed that India is finalising its stance on the EU's Carbon Border Adjustment Mechanism (CBAM) at the WTO. "We have been raising the issue... the EU has informed it informally in the WTO, but has not notified," the official said.
India is also currently negotiating a free trade agreement (FTA) with the EU, with discussions continuing on the potential impact of the CBAM, which is set to take effect on 1 January 2026. The mechanism could impact exports from carbon-intensive sectors, including steel, cement, fertilisers, aluminium, and hydrocarbons.
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