Extending a warm hand of friendship to Pakistan, India may soon take a giant leap and allow foreign direct investment (FDI) from the neighbouring country. A proposal to this effect has been moved by the commerce and industry ministry to the finance ministry. The proposal calls for the possibility to amend the rules under the?Foreign Exchange Management Act (Fema), which currently does not allow Pakistan to invest in India. As per the present FDI policy, a non-resident entity, other than a citizen of Pakistan or an entity incorporated in there, can invest in India.
Talking to FE a senior official of industrial policy and promotion (DIPP) said, ?The talks are on and it is now for the finance ministry to follow it and come up with a notification.? However, the official said that the move might take some time as, trade normalisation is the first step which will be followed by allowing in investments. India has already done a similar change for Bangladesh.
On being asked, if the following change would need any Parliament decision, the DIPP official said: “The change in the FEMA regulations can be simply done by issuing a notification.”?Investments from Pakistan are not allowed due to security concerns. The move comes as another bold step from India after India’s talks to improve trade relations with Pakistan. Commerce, Industry and Textiles Minister Anand Sharma is currently visiting Pakistan along with a big industry delegation.
Hailing the decision, business community from Pakistan called the steps as fruitful ways and means to boost business sentiments.??Mian Nasser Hyatt Maggo of Al-riaz Agencies said,??We are in the business of petrochemicals and have been trading with India through third countries. We are doing business with India for quite some time and we have been very happy. Considering there is a huge demand for almost 30,000 million tonnes per month of petrochemicals from Pakistan, once business ties improve we shall be able to cater to India and invest in India in a bigger manner.