NEW DELHI: Business ties between India and Pakistan looked set to deepen on Friday after their commerce ministers indicated that India was open to inviting foreign direct investments from Pakistan.
“As part of the initiatives to promote liberal trade, India has in principle agreed to FDI from Pakistan,” India’s Commerce and Industry Minister Anand Sharma said after a meeting here with Pakistan’s Commerce Minister Makhdoom Amin Fahim.
Obstacles were being addressed, Mr Sharma said, adding that the procedures and necessary requirements for allowing FDI from Pakistan were in the formulation stage and would be notified very soon.
Both the countries have also agreed in principle to allow opening of bank branches to facilitate financial transactions and ensure smooth trade. Both the Reserve Bank of India (RBI) and the State Bank of Pakistan have held several rounds of talks in this direction and a very positive situation has emerged. “Both RBI and State Bank of Pakistan are in favour of opening up of branches on both sides of the border,” Mr Sharma remarked.
Mr Fahim endorsed the idea, saying that both sides were on the same page as far as the decision on allowing bank branches on both sides to operate were concerned.
An India-Pakistan Business Council will be set up soon to be co-chaired by both the countries.
Mr Sharma said that following the positive steps taken by Pakistan, India would also strike off 30 per cent of the ‘sensitive list’ during the next four months as a confidence-building measure.
“We have also decided to open up negotiations in the hospitality, education and tourism sectors and experts groups will be constituted on these issues to work out the modalities for talks,” Mr Fahim said.
Both ministers left for Attari-Wagah border near Amritsar to inaugurate the second Integrated Check Post gate that would ease the road traffic and provide upgraded infrastructure for both traders and ordinary travellers using the land route.
Indian Home Minister P. Chidambaram opened the Attari checkpost.
“It will not only help us economically but our ties with Pakistan will improve considerably,” said Punjab Chief Minister Parkash Singh Badal.
The integrated checkpost has come up on 118 acres of land and can accommodate 600 trucks at a time. It has new storage
godowns, wide roads and a luxurious passenger terminal. It is also fitted with 233 CCTV cameras.
AFP adds: Commerce Minister Anand Sharma said a deal to ease visa curbs on business travel between the South Asian neighbours was also in the works.
Dismantling trade barriers has emerged as a key instrument in normalising ties before the two countries tackle thornier disputes, including Kashmir. India warily resumed peace talks last year after suspending them in the wake of the 2008 Mumbai
Amin Fahim was in New Delhi for discussions with Mr Sharma and to attend a Pakistani commercial fair, the largest-ever held on Indian soil. The four-day exhibition showcases ‘contemporary’ Pakistan’s top jewellery, furniture and clothes designers.
Mr Fahim called the new Attari-Wagah crossing a ‘milestone’ in relations.
Indian and Pakistan officials have been looking at the so-called “China option” as a model for future ties. Beijing and New Delhi are pursuing stronger economic ties while resolving outstanding issues, such as a longstanding border dispute, in a “step-by-step” fashion.
Direct official trade of $2.6 billion between India and Pakistan is heavily tilted in the former’s favour, but unofficial trade, much of it sent through third nations, is estimated at up to $10 billion.
The trading post and Pakistan’s granting of the most favoured nation status to India, ending strict curbs on what New Delhi can export across the border and due to come into effect by year end, could nearly triple bilateral trade to $8 billion in two years.