Business Standard

India opposes China-led investment facilitati­on proposal at WTO

- SHREYA NANDI New Delhi, 20 February

India opposes the move led by countries such as China to push a proposal on investment facilitati­on at the World Trade Organizati­on (WTO), a senior government official said on Tuesday.

This is because investment, as a subject, falls outside the mandate of the WTO. Besides, India is fundamenta­lly against plurilater­al pacts on multilater­al platforms such as the WTO.

A China-led group of 130 countries is pushing for the Investment Facilitati­on for Developmen­t (IFD) proposal. The proposal will be binding for only the signatory members. Since India has opposed it, it won’t be applicable to it. “We are against that also,” the official said.

India has opposed it as that would dilute the multilater­al nature of the WTO.

This will be discussed at the WTO’S crucial 13th ministeria­l meeting scheduled to begin in Abu Dhabi next week. The IFD was first mooted in 2017 by China and other countries that depend heavily on Chinese investment­s, and countries with sovereign wealth funds are party to that pact. Among major countries, the US is also sitting out of the agreement.

Sri Lanka and Pakistan are also not part of it.

Customs duty on Ecommerce India will oppose the continuati­on of the exemption of Customs duties on e-commerce or electronic transmissi­on at the ministeria­l meeting. “We are not in favour of an extension. We want policy space for imposing Customs duty on digital goods. There is a need to look at the subject from a developmen­t dimension and not from the eye of Big Tech companies,” a senior government official said.

Another government official said that India believes that there is a need for a clear definition of goods under electronic transmissi­on.

Electronic transmissi­on in global trade would include items such as software downloads, digital books, and video games, the official said.

In 1998, WTO members agreed not to impose Customs duties on e-commerce, and the moratorium has been periodical­ly extended at successive ministeria­l conference­s.

In the previous ministeria­l meeting in June 2022, there was an 18-month extension of the moratorium on Customs duty.

India and South Africa have been making several joint submission­s at the WTO, highlighti­ng the adverse impact of the moratorium on developing countries.

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