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India to allow FDI from Pakistan
Ashok Tuteja/TNS

New Delhi, April 13
India has decided in principle to permit Foreign Direct Investment (FDI) from Pakistan to promote economic and trade links between the two countries, Commerce Minister Anand Sharma announced today.

“We have decided in principle to allow FDI from Pakistan as part of the trade normalisation process,’’ he said at a joint media interaction with his Pakistani counterpart Makhdoom Amin Fahim after wide ranging talks between the two ministers.

Sharma said, "procedural requirements (for FDI from Pakistan) are underway. It will be notified soon."

At present, India does not permit FDI from Pakistan. The business community of Pakistan has been asking the Indian Government to amend the rules so that it could also invest in India.

However, the proposal had been drawing opposition from certain powerful sections in India, especially in view of security concerns. Pakistan does not have any restrictions on allowing Indian investments. But there have been no investment by India in Pakistan so far. Talks were also on between the two sides to allow banks from both the countries to open branches in each other's territory, he said, adding, the Reserve Bank of India and the State Bank of Pakistan were in favour of opening bank branches.

The Pakistani minister said "there has been progress in allowing banking services from both sides. In-principle we have agreed."

At present, India and Pakistan are engaged only in trade of goods, which has recently been liberalised.