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.
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