COMMUNICATION FROM INDIA

The following communication, dated 8 December 2025, is being circulated at the request of the delegation of India.

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The proponents of the 'Investment Facilitation for Development (IFD)' have been pursuing its incorporation as an Annex 4 Agreement of the WTO Agreement. This submission contributes to statements and communications made previously by India. India would like to further outline the legal and systemic issues with respect to the proposal of the proponents.

1  Doha Round, and the Ministerial mandate

It is pertinent to recall the history of the discussions on 'trade and investment' at the WTO.

A working group was established to examine the relationship between trade and investment at MC1 (Singapore Ministerial).[1] The working group was constituted with the understanding that it will not prejudge the decision on whether negotiations will be initiated in the future on this subject. The Ministerial Declaration read as under:

"It is clearly understood that future negotiations, if any, regarding multilateral disciplines in these areas, will take place only after an explicit consensus decision is taken among WTO Members regarding such negotiations."[2] (Emphasis Added)

The discussions on exploring the relationship between trade and investment continued at MC4 (Doha Ministerial). The Doha Ministerial Declaration read as under:

"Relationship between trade and investment

20. Recognizing the case for a multilateral framework to secure transparent, stable and predictable conditions for long‑term cross‑border investment, particularly foreign direct investment, that will contribute to the expansion of trade, and the need for enhanced technical assistance and capacity‑building in this area as referred to in paragraph 21, we agree that negotiations will take place after the Fifth Session of the Ministerial Conference on the basis of a decision to be taken, by explicit consensus, at that session on modalities of negotiations.

21. We recognize the needs of developing and least‑developed countries for enhanced support for technical assistance and capacity building in this area, including policy analysis and development so that they may better evaluate the implications of closer multilateral cooperation for their development policies and objectives, and human and institutional development. To this end, we shall work in cooperation with other relevant intergovernmental organisations, including UNCTAD, and through appropriate regional and bilateral channels, to provide strengthened and adequately resourced assistance to respond to these needs.

22. In the period until the Fifth Session, further work in the Working Group on the Relationship Between Trade and Investment will focus on the clarification of: scope and definition; transparency; non‑discrimination; modalities for pre‑establishment commitments based on a GATS‑type, positive list approach; development provisions; exceptions and balance‑of‑payments safeguards; consultation and the settlement of disputes between members. Any framework should reflect in a balanced manner the interests of home and host countries, and take due account of the development policies and objectives of host governments as well as their right to regulate in the public interest. The special development, trade and financial needs of developing and least‑developed countries should be taken into account as an integral part of any framework, which should enable members to undertake obligations and commitments commensurate with their individual needs and circumstances. Due regard should be paid to other relevant WTO provisions. Account should be taken, as appropriate, of existing bilateral and regional arrangements on investment."[3] (Emphasis Added)

In 2004, the General Council (GC) expressly dropped trade and investment from the Doha Work Programme. The relevant paragraph of this decision is reproduced below:

"Relationship between Trade and Investment:

The Council agrees that these issues, mentioned in the Doha Ministerial Declaration in paragraphs 20‑22, ……. respectively, will not form part of the Work Programme set out in that Declaration and therefore no work towards negotiations on any of these issues will take place within the WTO during the Doha Round"[4],

This reflected a conscious decision by the Membership to abandon any work towards negotiations on any of these issues during the Doha Round, which overlap with the elements that are now contained in the IFD Text.

No subsequent Ministerial Conference or General Council decision has revised the above‑stated negative mandate. Discussion on any aspect concerning trade and investment continues to remain out of bounds within the WTO framework. This fundamental issue needs attention.

2  Core foundational principles of the WTO

Incorporating new agreements into Annex 4 of the Marrakesh Agreement is not merely an issue concerning the right of States to enter into international agreements. The issue concerns the functioning of the WTO, how decisions on negotiations on new issues and adoption of rules on such new issues are taken, how and through what bodies decisions are implemented under WTO rules, and how that affects the future of the WTO and its core foundational principles.

The principle of "multilateralism" is central to the WTO's design and is reflected in the Preamble to the Marrakesh Agreement which encapsulates the "resolve" of the Members to develop an "integrated, more viable and durable multilateral trading system". When interpreting this Preambular recital, the Appellate Body in Brazil – Desiccated Coconut had noted that the "authors of the new WTO regime intended to put an end to the fragmentation that had characterized the previous system", reflecting on the move away from the Tokyo Round style codes.[5]

As stated in the Marrakesh Agreement:

·_        Article II.1 envisaged the WTO to provide the "common institutional framework for the conduct of trade relations among its Members" for matters related to the agreements and associated legal instruments included in its Annexes.[6]

·_        Article III.2 spelt out the key role of the WTO to be "the forum for negotiations among its Members concerning their multilateral trade relations" in matters dealt with under the covered agreements.[7] Further, in respect of future negotiations, the WTO is also to provide "a forum for further negotiations among its Members concerning their multilateral trade relations, and a framework for the implementation of the results of such negotiations, as may be decided by the Ministerial Conference". (emphasis supplied).

The IFD does not fall within the first sentence of Article III.2, as it does not concern a matter dealt with under the agreements in the Annexes to Marrakesh Agreement. As provided in the second sentence, negotiations on matters outside the existing annexed Agreements, require a decision by the Ministerial Conference to initiate the negotiations and establish the framework for their implementation. Even without prejudice to whether the IFD, an investment facilitation initiative according to the proponents, can fall within "multilateral trade relations", any new negotiation, as may be permissible under the Marrakesh Agreement, requires explicit mandate from the Ministers.

Further, the single undertaking has been a defining feature that contributed to the remarkable progress of the Uruguay Round negotiations allowing for cross‑sectoral trade‑offs among Members. Expanding Annex 4 through outcomes of Joint Statement Initiatives (JSIs) would erode the possibility to achieve meaningful inclusive multilateral outcomes that addresses the interests and concerns of the entire membership.

Decision making by consensus is another foundational principle of the WTO. Article IX.1 on Decision Making states that the "The WTO shall continue the practice of decision‑making by consensus…". The commitment to this approach underscores the importance of collective agreement and cooperation in the functioning of the WTO, ensuring that all Member voices are heard and respected in the decision‑making process. This is hardly surprising given that the WTO's built‑in objective of having an "integrated" and non‑fragmented trading system, necessitates any deviation to take place only with the consensus of the Membership.

These core foundational principles of the WTO highlighted above gain special prominence, and are in fact threatened, in light of the ongoing JSIs at the WTO including the IFD.

3  Requirements of Article X.9 of the Marrakesh Agreement

Adopting the IFD disciplines as an Annex 4 agreement requires fulfilment of the conditions of Article X.9 of the Marrakesh Agreement, which provides that: "The [WTO] Ministerial Conference, upon the request of the Members parties to a trade agreement, may decide exclusively by consensus to add that agreement to Annex 4". Thus, a decision to add such an agreement to Annex 4 is to be done exclusively by consensus.

This is one of the safeguards built into the Marrakesh Agreement to ensure that plurilateral agreements remain an exception and do not become a norm, and to ensure that the WTO Members continue 'to develop an integrated, more viable and durable multilateral trading system' as agreed in the preamble to the Marrakesh Agreement. There is no precedent for adopting Annex 4 agreements through the Article X.9 route; the existing Annex 4 agreements were carried forward from the Uruguay Round negotiations.

Whether it constitutes a 'trade agreement'

The Marrakesh Agreement conveys that the WTO's key objective is to provide a forum for governing multilateral "trade relations" among its Members and that the subject matter of disciplines within the WTO must be limited to "trade". Article X:9 also confines only to a 'trade agreement'. It is critical that this basic underpinning of the WTO is not undermined as new subjects are sought to be included in the WTO.

Article II.1 of the Marrakesh Agreement confirms that "[t]he WTO shall provide the common institutional framework for the conduct of trade relations among its Members…". It is important to recall that negotiation on these issues require a decision by the Ministerial Conference as established by Article III.2 of the Marrakesh Agreement. Thus, the scope of these issues is meant to be defined under the collective oversight of the entire Membership.

When WTO Members discussed investment in the context of the Working Group established during the 1996 Ministerial Conference in Singapore, the focus was on the 'relationship between trade and investment', which clearly shows the separation that WTO Members apply between the two concepts.

IFD is not a 'trade' agreement. It does not meet the conditions of Article X.9, and the foundational principle of the WTO governing multilateral "trade relations".

What constitutes the 'parties' that can present a request for adding a new Agreement to the Marrakesh Agreement Annex 4?

The Vienna Convention on the Law of Treaties (VCLT), at Article 2(g), defines 'party' to an agreement to mean "a State which has consented to be bound by the treaty and for which the treaty is in force". Article X:9 of the Marrakesh Agreement read in conjunction with VCLT Article 2(g) implies that a request to add a plurilateral agreement to Annex 4 of the Marrakesh Agreement can be made only after the participating members have fulfilled their domestic procedures to sign and ratify the agreement and for which the plurilateral agreement has entered into force.

4  Marginalisation of mandated issues, and diversion of limited WTO resources

The IFD represents a deviation from time honoured WTO negotiating practice. It suggests that select WTO Members can cherry‑pick areas of their interest with the long‑standing demands of especially the developing Members including LDCs being relegated to the sidelines. JSIs create an inherently discriminatory multi‑tiered multispeed trading system and reinforce asymmetrical bargaining power. JSIs such as the IFD have led to a diversion of the negotiating capital of the participating Members to areas without a multilateral mandate, which is not a priority for the entire Membership.

JSIs continue to use the WTO's resources and institutional setup without any mandate from the Membership. The nature and extent of involvement of the WTO Secretariat in respect of JSIs that are not yet part of the WTO framework poses significant systemic and budgetary concerns. Diversion of critical resources of the WTO for activities and issues that concern only a subset of members and that have not been mandated, raises questions of consistency with the priorities of the entire membership.

It is important that the WTO's institutional energy and resources are efficiently allocated to support discussions and work that is multilaterally mandated, concerns the entire Membership and remains consistent with WTO's core foundational underpinnings.

5  Conclusion

The Membership must have a collective interest in paying attention to the legal and systemic concerns with incorporation of the IFD into the WTO framework.

This submission is without prejudice, and India reserves the right to raise further or other matters, including in connection with the issues raised in this submission.

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