India to accept Pakistan FDI as ties warm
India said Friday it would soon welcome direct foreign investment from Pakistan in a deepening of commercial ties that could help propel a peace process between the nuclear-armed rivals.
The announcement by Trade Minister Anand Sharma, flanked by his Pakistani counterpart at a New Delhi news conference, came ahead of the opening of a second trading gate along the nations’ heavily militarised border later Friday.
“India has taken an in-principle decision to allow Pakistani FDI (foreign direct investment) in India to deepen our economic engagement,” Sharma said.
Sharma did not elaborate on the mechanics of the step, except to say “procedural requirements” were under discussion.
The trade minister also said a deal to ease visa curbs on business travel between the South Asian neighbours would be ready “soon.”
Increasing trade has emerged as a key instrument in normalising ties before the two countries tackle thornier disputes such as their rival claims to Muslim-majority Kashmir that has sparked off two of their three wars since 1947.
India warily resumed peace talks last year after suspending them in the wake of the 2008 Mumbai attacks by Pakistan-based militants that killed 166 people.
The Pakistani trade minister, Makhdoom Amin Fahim, was in New Delhi for the largest Pakistani commercial fair ever held on Indian soil, showcasing “contemporary” Pakistan’s top jewelry, furniture and clothes designers.
Fahim called the opening of the trading post at the Attari-Wagah crossing between Lahore in Pakistan and the northern Indian city of Amritsar a “milestone.”
The new trading post will see a four-fold increase in the number of trucks crossing the border daily to around 600.
Official two-way trade of $2.6 billion is heavily tilted in India’s favour but unofficial trade is estimated at up to $10 billion.
The trading post and Pakistan’s granting of Most Favoured Nation trade status to India, due to come into effect by year end, could nearly triple bilateral trade to $8 billion in two years, Indian industry chamber Assocham says.