India blocks WTO's Investment Facilitation for Development agreement amid FDI growth

India has decided not to back the inclusion of the Investment Facilitation for Development (IFD) agreement within the World Trade Organisation (WTO). The move comes as global foreign direct investment (FDI) grew by 14 percent in 2025, though flows to developing economies fell by 2 percent. The IFD aims to create clearer rules, speed up investment processes, and boost international cooperation. The IFD agreement seeks to improve transparency, simplify procedures, and encourage cross-border investment. Supporters argue that integrating it into the WTO would help channel more funds into developing nations. As of 2025, the WTO had formed a working group for the pact and set up a framework for technical support, though detailed implementation steps were still in early stages.

Bangladesh recently joined the agreement, bringing the total number of co-sponsors to 129. Despite this progress, India's commerce minister raised concerns that the IFD could stretch the WTO's mandate beyond its intended scope. The country's manufacturing sector, however, still requires FDI to expand capacity, adopt advanced technology, and stay competitive. Experts highlight that investment facilitation is vital for emerging economies to attract capital and stimulate growth. Yet, while global FDI rose in 2025, lower-income nations saw the sharpest decline in inflows. Countries like China and India, as key voices in the Global South, are encouraged to strengthen cooperation within regional and multilateral frameworks.

India's decision keeps the IFD agreement outside the WTO for now. The pact continues to gain support, with 129 members backing its goals of smoother investment flows and greater cooperation. Meanwhile, developing economies face ongoing challenges in securing the investment needed for long-term growth.