New Delhi, June 8: India has opened its doors to foreign direct investment from Pakistan. The investments will be cleared on a case-by-case basis by the Foreign Investment Promotion Board, which will address security concerns.
“We have allowed Indian investments in Pakistan and Pakistan’s investment, whatever is the amount, to come to India,” commerce minister Anand Sharma said.
According to Sharma, economic integration of South Asia is not possible without Pakistan.
“We are clear that without engaging with Pakistan, the South Asia Free Trade Agreement (Safta) cannot move forward,” he said.
Analysts said South Asian nations couldn’t be isolated from the globalisation process and economic integration was necessary.
Nisha Taneja at the Indian Council for Research on International Economic Relations said, “The two countries will have to quickly work out a bilateral investment and protection agreement, which will provide the much needed investor confidence, and a liberal business visa regime will help investors to take the decisive step.”
During a recent visit to India, Pakistan’s commerce secretary Zafar Mahmood had said, “There is a lot of potential of investment. We (Pakistan) make no restrictions on Indian investment in Pakistan. But we have not seen many proposals from Indian investors.”
India bans investment from Pakistan on security grounds. However, changes in the Foreign Exchange Management Act (Fema) will help to remove restrictions on investments from Pakistan.
The rules for Pakistanis could be similar to those for investors from Bangladesh.
Anand Sharma said five more industrial hubs will be notified by August to provide a boost to the manufacturing sector.
“Seven NMIZs (national manufacturing investment zones) already have been notified, that includes two in Maharashtra and five more in the pipeline. I think by August we will notify those,” Sharma said.
The government has been taking several steps to increase the share of the manufacturing sector in the gross domestic product to at least 25 per cent by 2020 from 16 per cent.