Bangalore: On August 1, India decided to allow
foreign direct investment (FDI) from Pakistan in a move to boost bilateral economic relations between the two countries.
"The government of India 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," an official statement said regarding the move.
Sources said that in order to address the security concerns in India, FDI proposals from Pakistan would be routed through the
Foreign Investment Promotion Board (FIPB).
Earlier in June 2012 at a Ficci function, emphasising the need to increase economic engagement with the neighbouring countries, Commerce and Industry Minister Anand 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 added.
The Indian government already had allowed investments from Bangladesh under the FIPB route.
