India gearing up to permit Pak FDI
Talks Underway To Allow Banks From Both Countries To Open Branches In Each Other's Territory
New Delhi, Apr 13: In a historic development, India has decided to permit Foreign Direct Investment from Pakistan which would go a long way in improving business and economic ties between the two countries. The announcement came in the backdrop of two countries opening a trade post on Wagah border.
The decision was announced by Commerce and Industry Minister Anand Sharma after meeting his Pakistan counterpart Makhdoom Amin Fahim. "India has taken an in-principle decision, as a part of the process to deepen our economic engagement, to allow FDI from Pakistan in India," he said.
Under current rules, Pakistani citizens cannot directly invest in India. Investment flows are unlikely to surge, but the move will go some way to addressing concerns by Pakistani businessmen that India places too many restrictions on them.
Liberalizing heavily restricted trade and investment flows is now the driver of peace efforts between the neighbours, whose fragile ties were shattered when militants attacked Mumbai in 2008.
Sharma further said, "Procedural requirements (for FDI from Pakistan) are underway. It will be notified soon.”
On his part Fahim said that besides, talks were underway to allow banks from both the countries to open branches in each other's territory. "RBI and State Bank of Pakistan are in favour of opening branches... There has been progress in allowing banking services from both sides. In-principle we have agreed," he observed.
At present, India and Pakistan are engaged only in trade of goods, which has recently been liberalized. Many Pakistani industries and banks are also keen on setting up business in India, which is possible only when a policy decision on allowing cross-border FDI is taken. An India-Pakistan Business Council will be set up soon, to be co-chaired by both the countries, Sharma added.
On multiple entry business visas, he said, "There will be a formal signing of agreement soon. It will be for one year initially.”
Despite thousands of years of shared history and culture and a combined population of 1.4 billion people, cross-border trade remains paltry - a legacy of three wars since their independence from Britain in 1947. The measures to improve economic ties is expected to help resolve pending contentions political issues as well, experts feel.
More than 600 Pakistani businesses are in New Delhi this week at a trade fair to promote their products to the Indian market.
Sharma also said an agreement to relax restrictions on visas for Pakistani businessmen was almost ready.
Lastupdate on : Fri, 13 Apr 2012 21:30:00 Makkah time
Lastupdate on : Fri, 13 Apr 2012 18:30:00 GMT
Lastupdate on : Sat, 14 Apr 2012 00:00:00 IST
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