In order to strengthen bilateral economic relations, India has allowed foreign direct investment from Pakistan, Commerce and Industry Minister Anand Sharma said today.
Emphasising the need to increase economic engagement with the neighbouring countries, Mr. Sharma said: “We have allowed Indian investments in Pakistan and Pakistan’s investment, whatever is the amount, to come to India”.
He said that without engaging with Pakistan, South Asian economic integration would not be possible.
“We are clear that without engaging with Pakistan, South Asia Free Trade Agreement (SAFTA) cannot move forward,” he said in New Delhi.
The minister said that in the last one year, trade ties between India and Pakistan have moved forward.
To allow investments from Pakistan, the Department of Industrial Policy and Promotion (DIPP) had sent a proposal to Finance Ministry for changes in Foreign Exchange Management Act (FEMA).
Sources said that in order to address the security concerns over investments from Pakistan, FDI proposals from the neighbouring country can be routed through the Foreign Investment Promotion Board (FIPB) which is headed by the Economic Affairs Secretary in the Finance Ministry.
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. The government had earlier allowed investments from Bangladesh under the FIPB route.
Further, Mr. Sharma said that Chinese businessmen are also interested in investing in India.
“We will be encouraging and welcoming Chinese investments,” he added.