India on 8 June 2012 announced to allow foreign direct investment from Pakistan. The move is aimed at strengthening the bilateral economic relations between the two countries. The decision will also facilitate the economic integration in the South Asian region.
The Union Finance Ministry had received a proposal by the Department of Industrial Policy and Promotion (DIPP) seeking changes in Foreign Exchange Management Act (FEMA) to allow FDI from Pakistan.
Under the present FDI policy, a Pakistani citizen or an entity incorporated in there is not allowed to invest in India. The Government had earlier allowed investments from Bangladesh under the FIPB route.
The bilateral trade between India and Pakistan for the year 2010-11 stood at 2.7 billion dollar. With 2.32 billion dollar exports, India dominated the trade, which grew at a rate of 47 per cent and also approaching forward to occupy 1 per cent share of Indian global exports.
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