Govt to allow FDI from Pakistan
AFP NEW DELHI INDIA said on Friday it would soon welcome direct foreign investment from Pakistan in a deepening of commercial ties that could help propel a peace process between the nucleararmed rivals.The announcement by Trade Minister Anand Sharma, flanked by his Pakistani counterpart at a New Delhi news conference, came ahead of the opening of a second trading gate along the nations’ heavily militarised border later on Friday.
“India has taken an in-principle decision to allow Pakistani FDI (foreign direct investment) in India to deepen our economic engagement,” Sharma said.
Sharma did not elaborate on the mechanics of the step, except to say “procedural requirements” were under discussion.
The trade minister also said a deal to ease visa curbs on business travel between the South Asian neighbours would be ready “soon.” Increasing trade has emerged as a key instrument in normalising ties before the two countries tackle thornier disputes such as their rival claims to Muslim-majority Kashmir that has sparked off two of their three wars since 1947.
India warily resumed peace talks last year after suspending them in the wake of the 2008 Mumbai attacks by Pakistanbased militants that killed 166 people. The Pakistani trade minister, Makhdoom Amin Fahim, was in New Delhi for the largest Pakistani commercial fair ever held on Indian soil, showcasing “contemporary” Pakistan’s top jewellery, furniture and clothes designers.
Fahim called the opening of the trading post at the Attari- Wagah crossing between Lahore in Pakistan and the northern Indian city of Amritsar a “milestone.” The new trading post will see a four-fold increase in the number of trucks crossing the border daily to around 600.
Official two-way trade of $2.6 billion is heavily tilted in India’s favour but unofficial trade is estimated at up to $10 billion. The trading post and Pakistan’s granting of Most Favoured Nation trade status to India, due to come into effect by year end, could nearly triple bilateral trade to $8 billion in two years, Indian industry chamber Assocham says.
Incidentally, braving slowdown in the US and Europe, India’s exports crossed $ 300 billion in 2011-12, but rising import bill pushed by high crude oil prices and the country’s obsession with bullion sent the trade deficit soaring to $ 185 billion. “I’m happy to say that India’s exports have crossed $ 300 billion in the last financial year,” Sharma said.
However, he also shared his concern over ballooning trade gap as imports shot up by 38 per cent to $ 485 billion for the last fiscal. Sharma noted that $ 300 billion taget was achieved despite lower export demand from traditional markets and eurozone crisis as outbound shipments grew in new markets of Latin America and Africa.
“We are on course, despite very difficult global scenario and the contraction of demand in some of the traditional destinations and the eurozone crisis,” the minister said while releasing the provisional data.
He said imports increased mainly due to high crude oil prices and huge demand for gold and silver. Consequently, the trade deficit is estimated to have widened to $ 185 billion from $ 104.4 billion in 2010-11.