Signalling further improvement in its relation with Pakistan, India on Friday said it would allow a flow of foreign direct investment (FDI) from that country soon.
“India has taken an in-principle decision, as a part of the process to deepen our economic engagement, to allow foreign direct investments from Pakistan in India,” commerce & industry minister Anand Sharma said at a joint news conference with his Pakistani counterpart, Makhdoom Amin Fahim. “Procedural requirements (for FDI from Pakistan) are underway. It will be notified soon,” he added.
Mutual cooperation would also be extended to opening branches of banks from both countries in each other’s territory. “RBI (Reserve Bank of India) and State Bank of Pakistan are in favour of opening branches,” he added.
Fahim said, “There has been progress in allowing banking services from both sides. In principle, we have agreed.” Under the current rules, Pakistani citizens cannot directly invest in India. The consolidated FDI policy of the ministry of commerce says, “A non-resident entity (other than a citizen of Pakistan or an entity incorporated in Pakistan) can invest in India, subject to the FDI policy.”
Trade relations between India and Pakistan have seen significant improvement in recent months, with Pakistan introducing the negative list of imports from India and both countries working on simpler business visa rules. On multiple entry business visas, Sharma said, “There will be a formal signing of an agreement soon. Initially, it will be for one year.” Also, trade delegations from both countries had recently met to explore trade and business opportunities.
Pakistan has committed to grant Most Favoured Nation status to India by the end of the current year. Sharma also said an India-Pakistan Business Council would be set up soon and this would be co-chaired by both countries