New Delhi: As an ambitious move to step up economic engagement, India and Pakistan are examining proposals to allow entrepreneurs to make cross-border investments and their banks to open branches in each others' territory.
The proposals were discussed at a bilateral meeting of officials last month here, minutes of which have been released by the Commerce Ministry Thursday.
The Pakistani side asked India to allow investment from their industry. "The Indian side informed inter-ministerial consultation is being done," the minutes said.
While Islamabad said that it places no restrictions on investment from India, there is virtually no Indian entrepreneur who has invested in the neighbouring country in the absence of a mutual arrangement.
The economic ties are restricted to merchandise trade, which itself is very low at about USD two billion.
On opening of bank branches, the two sides agreed to encourage their regulators to meet and decide modalities for taking the issue forward. "It is expected that the Central Bank of Pakistan will send an invite to Reserve Bank of India for holding a meeting at Karachi (soon)", the document said.
India's desire to strengthen its commercial engagement with Pakistan was also expressed by Commerce and Industry Minister Anand Sharma at South Asia Forum meeting, organized here by Ficci and Ministry of External Affairs.
"We are keen to build bridges of understanding and cooperation. It is an expressed wish of the Prime Minister (Manmohan Singh) to engage more (with Pakistan)," Sharma said.
He said India will bring down its peak tariff on imports from Pakistan to eight per cent from January next year, meeting the SAFTA obligations.