KARACHI:
Indian ministry of trade has given assurance that it will soften the condition of clearance from Reserve Bank of India (RBI) for cross-border investment in Pakistan.
According to the Indian law, its investors are required to obtain permission from RBI for investment and joint venture projects in Pakistan.
Investors of both the countries are keenly interested in investment and transfer of technology in various sectors. They have been engaged in initial talks for cross-border investment in both the countries but these are progressing at a snail’s pace because of difficulties in acquiring permission from RBI, the Indian central bank.
However, the recent assurance to Pakistani investors by the Indian trade ministry has revived prospects of joint projects in the two countries.
International Multi Group Chairman Sheikh Amjad Rashid, who is interested in joint investment projects with the Indian private sector in automobile and entertainment industries, told The Express Tribune that he met with Indian minister and joint secretary of trade during his visit to Delhi in mid-July and asked them to relax the condition of taking RBI permission for making investment. “In return, I was assured that joint investment projects by Pakistani and Indian businessmen will be considered on case-to-case basis and all possible facilities will be provided for investment in India.”
After returning from the trip, Rashid briefed Commerce Secretary Zafar Mehmood about the Indian offer, who expressed hope that India would also support the European Union’s concessional trade package in the World Trade Organisation (WTO).
Mehmood said Pakistan had placed no restrictions on cross-border investment with India, adding such investments would contribute to bringing economic stability in the region. Rashid said a proposal based on joint equity investment had been sent to the Indian trade ministry, adding since investors of both sides would invest equal amounts in each other’s country, the investment of private sector would remain secure in unfavourable circumstances as well.
He said joint investment would pave the way for transfer of technology and save the high cost incurred on bringing technology from Europe.
Rashid’s group is investing in an edible oil refinery in Karachi for which all machinery is being imported from Europe and this can be brought from India if conditions remain conducive. The group is also interested in manufacturing cheap Nano cars in cooperation with Tata Motors, which will encourage investment of $10 million.
Published in The Express Tribune, August 2nd, 2011.
COMMENTS (13)
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@Hedgefunder : I am not going to oppose your points. But then I have read blogs of Pakistanis who came to India and opined that India is lacking behind Pakistan in many aspects like Roads, Infrastructure , clean transport, clean environment , social and financial affluence and security - number of poor people in India are more (by percentage as well as grand total). Now both yours and theirs opinion may be subjective or neutral. But then how will common people know about that.
@Hedgefunder
Do us all a favor, and go away you Indian troll. If you don't like Pakistan, just say it.
We dont want this rickshaw tire cars one big pathan cannot sid inside it will go all bubling
What is the first requirement for Foreign Investment in any nation?? It very simple, Stabilty!! in terms of Security, Law & Order, Energy and Power sources to actually operate their businesses and lastly credible, educated and skilled population for employment !!! Without these basic s in place, trust me, its a non starter. I have travelled extensively for Investment Ops on behalf of clients and as part of syndicates and nowhere i have ever seen as dismal a situation as in Pakistan !! There are Nations in Africa and South America which are better equipped than Pakistan !!! Why even bother to look that far? just look at Bangladesh or Sri Lanka, even they have better infrastructure than what Pakistan has to offer !!! Yet this is a Nation which encourage lot of Investments, in early 70s, until Bhutto decided to Nationalise those very successful businesses run by private sector!!!!
@optimist: "Faithful to profit" is what they should be, as they are answerable to their shareholders !!! But the very Idea that Indian Govt is making gestures in the light of Pakistan's reluctance or inability, to deal with outstanding issues, while testing India's Intelligence, as to their efforts, is not how one can act and be accepted. Can you for a second, Imagine the Yanks being treated in this fashion, if there was an attack on their turf like Mumbai???
Nano should be called Nino means little baby in latin haha.
@ Hedgefunder
You seem too worried about 'innocent' Indian investors! Don't worry. These business people know what they are doing. They are not faithful to anyone. They are faithful to profit. Same is true about any investor from ANY country!
@Hedgefunder: :) Aaah Hedgefunder bhai, your sarcasm knows no bound. Although, this time, I know you are being serious. But, let me put your doubts to rest, at least make the attempt to win you over. By mutual investment in our economies, we stand to at the bare minimum, let alone the building of trust and human to human contact, create a surplus, by hastening the multiplier effect through transactional velocity, of our rather limited cash supply. The more we make finances and services, available within the SAARC region, the greater the hastening of our individual and collective development. Sounds pretty academic, I am sure. However, it is to be noted, that though Pakistan is politically and culturally, in a pickle, it is not entirely an economic basket case ... Chinese or American presence or not withstanding. This is because, Pakistan's economic trajectory for future growth will parallel that of India's. It too will be driven by domestic consumer base and spurts in the same sectors as India's ... viz. healthcare (an ageing population), education (a young jobseeking demographic), tourism (foreign exchange earner and employer of large swathes of the populace), services (on account of the pressure of urbanization), finance (real estate, white goods, mobile ownerships) and of course, retail. India can enable Pakistan in all these sectors, and the services will require minimal rescaling given the similar operational and logistical challenges and exposures. But, rather than export these from India to Pakistan as finished products, it is best, and more sustainable in the long term, for Pakistan to build the capabilities to create and consume these values at home using its own expanded manufacturing foundations. With Indian MNCs acting only as guides with Pakistani joint venture partners. This is not very unlike, what New Delhi did for two decades since the Maruti Suzuki joint venture, due to the cultural sensitivity of the Indian politicians, regarding technology transfers and foreign ownership limitations. (The famous 49-51 split.) Remember, one drank not just Pepsi, but Lehar Pepsi. One rode not Honda, but Hero Honda. Today Indian auto industry is at par with the best in the world. But we had to start somewhere, and it would not have been possible if we hadn't taken the chance with the Japanese, and likewise them with us. The Japanese, too were jittery of a JV in a quasi-Socialist country, with a government entity, to produce a 'people's car', with a minority stake. But they did. The result is, they have a strong presence in the country today. And for that much more, the India-Japanese partnership is so much wider. If this could work for the Asian cousins, it will do wonderfully for the South Asian siblings. We shouldn't shy from building the bridges, and the cars, and the relationships.
@Hedgefunder:
There's never a bad time to think about trade. Giving permission is just a start. Whoever invests will consider all the points that you mentioned. If at all anybody would lose money it would be them (not unless you are considering investments too!). If there's no economic interlinkages, everybody will just keep harping rivalries and age-old issues. Indian businesses are globally competent. They'll not jump with joy and invest foolishly, just because the government is now allowing them to.
Bad Move !! In present climate and with all the outstanding issues between the nations, there is no need for India to make these sort of gestures towards Pakistan !!!! Any investment in this country, would be classed as highly risky, due to their current situation, economically and politically too!! So why would any sane investor want to invest in this cesspit , where returns are likely to be low and risks are likely to be very high????
@Secrecy: And we welcome tourists from Pakistan. Come, see our history and our poverty. As well as our industry ... they are all part of us. And they will all spur us on to aim higher. This is not be verbose / chest thumping. But only to state, that we no longer apologise for who we are. South Asians must stop being apologetic, of their collective and individual identities. It is that lack of projecting ourselves confidently, which has made us the victims of colonialism and external interventions. Glad to know, it will change our own lifetimes. Our best to you, always.
We welcome any investment from India.