PTI

NEW DELHI IN order to strengthen bilateral economic relations, India has allowed foreign direct investment from Pakistan, Commerce and Industry Minister Anand Sharma said on Friday.

Emphasising the need to increase economic engagement with the neighbouring countries, Sharma said: “We have allowed Indian investments in Pakistan and Pakistan’s investment, whatever is the amount, to come to India”.

He said that without engaging with Pakistan, South Asian economic integration would not be possible.

“We are clear that without engaging with Pakistan, South Asia Free Trade Agreement (SAFTA) cannot move forward,” he said at a FICCI (Federation of Indian Chambers of Commerce and Industry) function.

The minister said that in the last one year, trade ties between India and Pakistan have move forward.

To allow investments from Pakistan, the Department of Industrial Policy and Promotion (DIPP) had sent a proposal to Finance Ministry for changes in Foreign Exchange Management Act (FEMA) to allow FDI from Pakistan.

Sources said that in order to address the security concerns over investments from Pakistan, FDI proposals from the neighbouring country can be routed through the Foreign Investment Promotion Board (FIPB) which is headed by Economic Affairs Secretary in the Finance Ministry.

As per the present FDI policy, a non-resident entity, other than a citizen of Pakistan or an entity incorporated in there, can invest in India. The government had earlier allowed investments from Bangladesh under the FIPB route.

Further, Sharma said that Chinese businessmen are also interested in investing in India.

“We will be encouraging and welcoming Chinese investments,” he added.

Meanwhile, Pakistan and China are among the countries invited for the regional investor’s meet on Afghanistan to be held in New Delhi on June 28 to discuss ways to boost internationalprivate sector investment in the war-torn country.

Official spokesperson in the Ministry of External Affairs Syed Akbaruddin said in New Delhi that though it is largely a private sector meet, India will also invite government entities for the conference aimed at exploring and promoting investments in Afghanistan on long-term basis.

“Yes, I would like to confirm that all countries which were participants of the Istanbul process are being invited and that includes Pakistan too,” he said when asked if Pakistan was also invited for the meet.

This is the first international meet to be held by India involving the private sector.

Significantly, the Indian initiative was also announced earlier in the day in Washington by Assistant Secretary of State for South and Central Asia Robert Blake.

This conference, Blake said, will feature over 50 Afghan firms – with at least 10 of the companies owned by women –whose presence will spur direct business-to-business links between Afghan and international firms.

The New Delhi conference then will inform a July 8th government summit in Tokyo that will develop strategies for Afghanistan’s economic development, he added.