India Inc hails allowing FDI from Pakistan
New Delhi: Industry on Thursday hailed implementation of the decision to permit foreign direct investment from Pakistan, stating Islamabad should reciprocate by granting New Delhi the Most Favoured Nation (MFN) status.
"It is a great decision...Now Pakistan should also implement the MFN status for India," Ficci Secretary General Rajiv Kumar said.
The government decision to allow FDI from Pakistan was notified by the Reserve Bank yesterday.
"It has now been decided that...A person who is a citizen of Pakistan or an entity incorporated in Pakistan may, with the prior approval of the Foreign Investment Promotion Board, purchase shares and convertible debentures of an Indian company under FDI Scheme, subject to the terms and conditions specified...," the RBI notification said.
However, FDI in the strategic sectors like defence, space and atomic energy would remain prohibited, RBI said.
Assocham Secretary General D S Rawat also welcomed the decision.
"It would lead to enhancement of bilateral economic engagement," he said, adding the mutual trade has remained negligible, which should pick up," he said. The bilateral trade is USD 2.7 billion.
Indian industry said Pakistani businessmen can explore sectors like cement, textiles and sports for investments in the country.
With India permitting investment from Pakistan, Indian industry expects Islamabad to grant the much delayed MFN status to New Delhi. This would mean that exports from India would be treated by Pakistan at part with its other trading partners.
India had granted the MFN status to Pakistan way back in 1996.
However, Pakistan has liberalised its trade regime with India in March when it shifted from positive list rules to negative -- meaning barring 1,209 items, it allows import of all other Indian goods.