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| Pakistan's decision on most favoured nation status will liberalise trade over the border |
India has
announced that it will allow investment from Pakistan in what is seen as a
boost for bilateral economic ties.
The
commerce ministry said a citizen or a company of Pakistan is permitted to make
investments in India.
However, no
such investments can be made in defence, space or atomic energy, the ministry
said.
India and
Pakistan resumed formal peace talks last year after they were broken off
following the 2008 Mumbai attacks.
India
blamed the attacks on Pakistan-based militants.
A commerce
ministry release on Wednesday said all foreign direct investment proposals from
Pakistan would need the clearance of the country's Foreign Investment Promotion
Board (FIPB).
"It is
a great decision... Now Pakistan should also implement the most favoured nation
(MFN) trading status to India," Rajiv Kumar of the Federation of Indian
Chambers of Commerce and Industry (FICCI) was quoted as saying by the state-run
Doordarshan news channel.
Earlier
this year, Pakistan indicated that it would offer India MFN trading status,
which India has already extended to Pakistan.
The move is
part of a pledge made last year to liberalise trade with India. Formal trade
between the countries is worth $2.7bn a year, while informal trade, by way of
smuggling, is believed to be three times that, experts say.
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