The Finance Ministry is expected to notify shortly guidelines for allowing outward investment by Indian companies and individuals through the semi-automatic route in Pakistan. This will open up bilateral investment channels and give a boost to trade, Commerce Secretary S. R. Rao and Joint Secretary in the Commerce Ministry Arvind Mehta said here on Wednesday.
The move comes ahead Commerce Secretary-level talks between the two countries in the middle of next month.
“The Ministry of Finance, along with the Reserve Bank of India, will soon notify the rules for making outbound investments in Pakistan through the semi-automatic route. There are certain issues and concerns that need to be sorted out on both sides. We are in the process of putting in place those clarifications, and the notification is expected to come out before or after the visit of External Affairs Minister S. M. Krishna to Pakistan early next month,’’ Mr. Mehta said. The Ministry would also notify within a week the 30 per cent reduction in tariff lines, which had already been cleared by the Union Cabinet. “Under the SAFTA agreement”, the tariff lines on 264 items in agriculture, textiles and the petroleum sector are being brought down. The aim is to reach to the 5 per cent tariff line in the next three years, he said.
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Mr. Rao said a roadmap was laid down by the two commerce ministers in April for taking forward the dialogue on trade. He did not see any hurdle in Pakistan granting the most favoured nation status to India. “Pakistan has promised to move ahead on eliminating the list of 1,209 items on the negative list,”he said.
Both engage in dialogue
India and Pakistan, in the meanwhile, are now engaged in a dialogue to ensure that the‘trade normalisation’ process would not get derailed in the event of a Mumbai-like terror attack in future, Mr. Mehta said.
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“Both the nations and their negotiators at various levels are currently engaged in a dialogue to work out a strategy that will ensure that in case of any Mumbai like incident in future and ``unwanted elements’’ trying to disrupt the normalisation and peace process, the dialogue does not get derailed. It is important that such a process of economic engagement will further strengthen the peace process,’’ Mr. Mehta told select journalists here.
Mr. Rao said India would only act as a transit point for transportation of gas to Pakistan and there was no proposal to export gas to Pakistan. Similarly, talks were being held to lay a pipeline for carrying petroleum products to Pakistan in the near future.
On the electricity front, he said, a power grid connection between Amritsar and Lahore was being worked out. Pakistan was keen on importing power from India, he remarked. Mr. Mehta said the next meeting of commerce secretaries of both countries could possibly take up the issue of connecting the capitals of the two nations with air links. “We will encourage the Civil Aviation Ministry on our side to enter into a dialogue to bridge this connectivity divide and open new cities for air connection. Hopefully, Pakistan will also respond positively to such a proposal,’’ he hoped.