India to Allow Direct Investment From Rival Pakistan

Posted April 13th, 2012 at 7:45 am (UTC-5)
Leave a comment

India says it plans to allow Pakistan to directly invest in the country, in another sign of warming ties between the longtime rivals.

Indian Trade Minister Anand Sharma told reporters Friday that “India has taken an in-principle decision to allow Pakistan FDI (foreign direct investment) in India to deepen our economic engagement. He did not elaborate and spoke after meeting with his Pakistani counterpart, Makhdoom Amin Fahim, in New Delhi.

The announcement came as the two countries were set to open a trading post along the nations' heavily militarized border at the Attari-Wagah crossing between the Pakistani city of Lahore and the Indian city of Amritsar.

India is also hosting a trade fair in the capital, where hundreds of Pakistani businesses are promoting their goods.

India and Pakistan have pledged to increase trade from their current level of $2.3 billion to at least $6 billion in three years.

Last year, Pakistan's Cabinet approved a proposal to grant India “Most Favored Nation” trade status, which would remove tariffs and allow the countries to trade on equal terms. India granted Pakistan MFN status in 1996.

On Friday, Trade Minister Sharma also said an agreement to relax visa restrictions on business travel between both nations was almost ready.