The Department of Economic Affairs (DEA) is not in favour of India supporting a China-led informal initiative at the WTO on investment facilitation for development (IFD), backed by 130-member countries, as it could encroach on the country’s policy space, sources have said.

“The DEA is very careful about any agreement related to investments with other countries. Even at the bilateral level, it weighs the details carefully, especially rules related to dispute settlement. At the WTO, the stakes are higher as there are many countries and it does not want to lose policy space,” a person tracking the matter told businessline.

So far, India has refused to participate in the IFD talks at the WTO on grounds that the agenda falls outside the mandate of the global trade body, according to the Commerce Ministry.

Moreover, India is also of the view that the proposed IFD’s ‘appeal and review mechanism’ is problematic, which may put the onus on the government to consult investors on policy matters, the source said.

WTO meet next week

With the 13th WTO Ministerial Conference starting in Abu Dhabi next week, the proponents of IFD, which includes several developed countries, are trying to bring it in formally.

“As IFD is a non-mandated, non-multilateral issue, India has been of the view that its inclusion in WTO formally would go against the fundamental rule of consensus-based decision-making,” the source said.

Although as part of annexure 4 of the WTO, the pact would be binding only on signatories, India is apprehensive that it would change the scope and structure of the WTO if allowed.