In a bid to give a big boost to trade and bilateral relations and enhance economic cooperation, the Union government on Wednesday notified a law permitting investments by Pakistan citizens and companies in India in sectors/activities other than defence, space and atomic energy.
“The government has reviewed the policy and decided to permit a citizen of Pakistan or an entity incorporated in Pakistan to make investments in India, under the government route, in sectors/ activities other than defence, space and atomic energy,’’ says the notification issued by the Department of Industrial Policy and Promotion.
“The citizens and companies of Pakistan would also be able to float joint ventures and participate in any kind of investment ventures, including real estate, stock market, energy and other sectors. These investments will be screened and vetted before being given approval,’’ a senior DIPP official said.
Pakistan was the only country in the negative list under the Foreign Exchange Management Act (FEMA), which prohibits investments in India. Sri Lanka was removed from the list in 2006 and Bangladesh in 2007.
Officials in the Industry Ministry said that in order to address the security concerns over investments from Pakistan, FDI proposals from Islamabad would be routed through the Foreign Investment Promotion Board (FIPB), which is headed by the Economic Affairs Secretary in the Finance Ministry.
Both countries had agreed to allow one-year multiple entry visas for business visitors and entry and exit through different cities.