Trade diplomacy: India opens doors to Pakistan investment
India on Wednesday overturned its ban on foreign investment from Pakistan in an unprecedented move amid a series of confidence building measures to build goodwill between the neighbours.
“The government of India has reviewed the policy... and decided to permit a citizen of Pakistan or an entity incorporated in Pakistan to make investments in India, under the government route, in sectors/activities other than defence, space and atomic energy,” said a statement from the Indian commerce ministry.
Earlier, no investment from person or company resident or registered in Pakistan was permitted. The move will allow all sorts of investments from Pakistan without any limit on the quantum to be invested. However, a ban on investments in defence, space and atomic energy will remain and all propositions must come via the Indian government.
“We welcome this decision,” said Pakistan foreign ministry spokesperson Moazzam Khan.
“It will definitely benefit Pakistani investors and industrialists. We hope this decision will be fruitful for the people of both countries.”
The decision will take place with immediate effect and accordingly the Consolidated FDI Policy effective from April 10, 2012 has also been amended.
Bilateral relations between India and Pakistan have scaled new heights since April last year. Trade ties between the two neighbours have seen new initiatives. The decision to accept foreign direct investment from Pakistan was taken in April when the trade ministers of the South Asian rivals met in New Delhi.
The improved relations between the rivals stem from Pakistan’s decision to grant India “Most Favoured Nation (MFN)” status by year end, meaning Indian exports will be treated the same as those from other nations.
MFN status will mean India can export 7,500 tariff lines to Pakistan, up from around 2,000 at present, and the countries aim to lift bilateral trade to $6 billion within three years, officials have said. Official bilateral trade is just $2.7 billion and heavily tilted in New Delhi’s favour, according to most recent figures, but unofficial trade routed through third countries is estimated at up to $10 billion.
The neighbours also discussed the possibility of allowing banks from both countries to open cross-border branches. State Bank of Pakistan and Reserve Bank of India had recently met and finalised a deal to open up banking outlets in each other’s country which would reduce the transaction cost of exporters. The final nod by India’s Department of Economic Affairs and Department of Industrial Policy and Promotion (DIPP) and the finance ministry of Pakistan is now being awaited.
India has also offered to ease visa curbs on business travel and for Pakistani businessmen. The decision is yet to receive formal approval from Pakistan. In further progress, the newly-built integrated check post (ICP) at Attari-Wagah border was opened to boost trade.
(WITH ADDITIONAL INPUT FROM AFP)
Published in The Express Tribune, August 2nd, 2012.
COMMENTS (10)
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The corrupt Pakistani moguls know that Switzerland and West is not safe now as they have enacted new strict laws against graft money laundering, so they are looking for other safe heavens. Indian government exactly know their needs and how much money the "Pakistan Plunder Party" (name for all the corrupt politicians and bureaucrats) possess. This fact is so obvious when at a time we are in a dire need of FDI and job opportunities in Pakistan, the government of PPP has begged this facility from India and allowing the flea of local capital to the neighbor. Only the glorious government of PPP could have come up with such innovative solutions for the country's development as they found solutions for the electricity shortage by installing rental power plants costing 3 times the IPP's when the real cause of the shortage was lack of funds to buy the fuel for IPPs. Jiaya Zardari, Jiaya Bhutto, Jiaya Pakistan Plunder Party.
As I said before : Return of the Prodigal. Finally every thought, every word and every deed of Pakistan will originate from India or its seems so.
No... India's economy is much stronger. Now is not good time to do it coz then they will invest as well. Bangladesh is totally in India's clutches coz of India's investment. So, b careful what u wish for.
But a visa for a conman man is still like climbing a china wall !!!
Well come news, Pakistan should do the same or more on this.
Pakistan is trading with all the big boys now. Smart move. Just hope and pray there is no Terrorist attack on India ever. India values the life of its citizens.
Both countries need to update the double taxation treaty.The present treaty was executed in 1947 and does not respond to modern times.With new tax treaty, increased mutual trade / investment will not be possible
Good, new markets will be opened for our product. A hugh market like india cannot be ignored
Come on India-Pakistan, you can do much much better than this !!