India allows FDI from Pakistan even as it is yet to get MFN status from Islamabad
27.11.2012 (UNI) India has permitted foreign direct investment (FDI) from Pakistan in various sectors except in defence, space and atomic energy, the government informed Parliament.
Department of Industrial Policy and Promotion (DIPP) under the Commerce Ministry had on August 1 permitted such investments from Pakistan and Reserve Bank on August 22 had accordingly amended FEMA regulations to allow them, Minister of State for Commerce and Industry Purandeswari said in a written reply in Lok Sabha.
She said RBI on September 7 announced it would also consider overseas investments by Indian companies in Pakistan under the government approval route.
Islamabad has yet to grant New Delhi the most favoured nation (MFN) status to normalise trade between the two neighbours. India had granted MFN status to Pakistan in 1996.
A top Pakistani parliamentary panel has expressed reservations about the government's move to grant the MFN status to India, with some of its members claiming that the measure would 'destroy' the domestic agriculture sector.
Members of the Public Accounts Committee, which is headed by the ruling PPP lawmaker Nadeem Afzal Chan, voiced their reservations during a meeting and sought a detailed briefing on the matter from the Commerce Ministry after Muharram holidays.
The PPP-led government has repeatedly said it is committed to phasing out a negative list regime for trade with India by December 31 and granting MFN-status by the beginning of next year.
The two countries have taken several steps in recent months, including liberalising the visa regime, especially for business people.
The new visa pact is ready to be signed. UNI