India May Bend FEMA to Allow FDI from Pakistan.

According to officials in the commerce and industry ministry, the finance ministry will certainly discuss the issue with the home ministry before taking a final decision. “It will not require an amendment to the Act. A notification will suffice after the home and finance ministries approve of it,” a commerce and industry ministry official said. Once Fema rules are amended, the overall FDI policy would apply to Pakistan also and proposals for investment in India by companies from Pakistan would be routed through the Foreign Investment Promotion Board.

Pakistan has been long been complaining about the Indian government’s policy that bars its industry from making investments in India. India Inc too is interested in floating joint ventures in Pakistan and has asked the two governments to set up an institutional mechanism that would guarantee protection to each other’s investments. At present, Indian companies too have not made any investment in Pakistan.

Addressing a joint press conference on Wednesday with his Pakistan counterpart last evening, Commerce, Industry and Textiles Minister Anand Sharma said, “The question of investment becomes relevant as economic engagement between the two countries deepens. The concerns expressed (by Pakistan) on investment have been seriously taken on board. Will take an appropriate and correct view,” he said. Sharma later told mediapersons that the issue has been discussed at the inter-ministerial level in New Delhi and between the commerce secretaries of the two countries.

Indian government officials today said the two sides are also engaged in a dialogue to liberalise the visa regime that was signed way back in 1974. Under the proposed new visa regime, there would be different provisions for different categories of individuals. The joint working group addressing visa issues has finalised a draft agreed to by both the sides.

“Final approvals from the ministry of external affairs and the home ministry are pending,” an official said.

Under the category of business visas, it has proposed that two apex industry chambers from either side may endorse business persons who plan to visit each other’s country. “This should be respected by the authorities of both sides,” said the official. From the Indian side, CII and FICCI would endorse business persons for grant of visa by government agencies.

According to government officials, an India-Pakistan CEOs forum with representatives from the government may also be set up to discuss the sectors of interest for investment by businesses in the two countries. “They can identify sectors and the government will facilitate the investments,” the official said.

Source : indianexpress.com