India’s symbolic decision to allow foreign direct investment (FDI) from Pakistan in all sectors, except defence, space and atomic energy, is a move that has widespread repercussions, far beyond the simple economic gains that both sides may accrue as a result of this step. Apart from the vast opportunities that this has opened up for Pakistani investors and the potential employment opportunities that this may create in India, the move promises prospects of immediate and long-term political gains as well. As neighbours who have complementary economic strengths, Pakistan and India should have been natural trading partners. War and politics has kept this from becoming a reality. But if progress continues to be made on issues such as FDI, it should lead to a massive increase in cross-border trade and that will ultimately help the economies and people of both countries.
On the political front, allowing Pakistanis to invest in India also represents a big breakthrough. Progress in peace talks has been halting and piecemeal. For all the hope that comes from every cordial summit between high-level officials of the two countries, there is usually a step back, such as when an agreement could not be reached on liberalising the visa regime. Now that India has opened its economy to Pakistani investors, we should reciprocate. There may be far less interest among Indians in investing in Pakistan but the gesture would be seen as another confidence-building measure on the long, rocky road to peace.
The important thing for both India and Pakistan now is to ensure that breakthroughs such as this help the peace process gather momentum. Now is the time to follow up with other nods to peace. India has invited our cricket team to play in their country. Another positive and much-needed step will be to make it easier for citizens of both countries to get visas to travel across the border; easing the visa regime should be a priority. There is no greater way of defeating the hawks on both sides than by making an India-Pakistan alliance an inevitability and a reality. This can only be done by ensuring that the fate of both the countries is tied together — whether by trade or political necessity.
Published in The Express Tribune, August 3rd, 2012.