Investment curbs on Pak may be lifted

NEW DELHI: At a time when the National Security Council secretariat has finalised a proposal for scrutiny of all foreign investment cases, the commerce and industry ministry is pushing for opening the doors to investment from Pakistan and Bangladesh.
Officially, Pakistan and Bangladesh are the only two countries which face investment curbs. Investment from companies from the two countries are prohibited under the Foreign Exchange Management Act.But all that could soon change with Pakistan commerce secretary Syed Asif Shah on Friday revealing that India had suggested an agreement to facilitate investment flows between two countries. "We have noted the request of Indian authorities. We will take it back to our leadership and discuss it in detail," Shah said.
Only last week, junior minister for commerce Jairam Ramesh had said in Bangladesh that India was reviewing the investment curbs. Around the same time, NSCS had floated the final blueprint of the National Security Exceptions Bill that will enable the home ministry to comb all suspicious foreign investment proposals. On the recommendations of the external affairs ministry, NSCS has dropped its original proposal to restrict investment from countries like China which are seen as sensitive.
But the commerce ministry's thinking is grounded in economics. By lifting restrictions on investment from Bang-ladesh, the government is expecting to help the case of a large number of Indian companies to invest across the eastern border to take advantage of the cheap gas supplies available. Tata group's $3 billion investment proposal has been pending with the Bangladesh authorities for months. India is suggesting a case-to-case approval for companies from Bangladesh.
Similarly, with Pakistan too, the government was hoping to improve relations based on stronger trade and economic ties. The commerce secretary level talks that concluded on Thursday has set a target of stepping up bilateral trade to $10 billion over the next three years from around $1.5 billion at present.
In another instance of improving relations, Shah said both countries were looking at mutual recognition agreements so that product standards on either side do not impede trade. The first consignment of cement from Pakistan will land in India by end of this month after mandatory certification.