India moots investment agreement with Pakistan

India and Pakistan also takes host of measures to improve trade relations and set a $10 billion bilateral trade target by 2010, reports Gaurav Choudhury.

India has proposed the idea of signing a bilateral investment promotion agreement with Pakistan that would allow investment by companies from both the countries to invest across the border.

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"We have noted the request of Indian authorities on the agreement. We will take it back to our leadership and discuss it in detail," Pakistan commerce secretary Syed Asif Shah told Indian industry leaders at the Federation of Indian Chambers of Commerce and Industry (FICCI) in New Delhi.

Under the present policy regime, India does not allow foreign direct investment (FDI) from Pakistan and Bangladesh.

Minister of State for Commerce Jairam Ramesh recently said that India was reviewing the current restriction imposed on FDI from Bangladesh and there could be some positive news for Bangladeshi investors in the near future.

“We have been reviewing these restrictions with a view to enabling FDI from Bangladesh into India on a case-to-case basis, subject to security clearance. I am hopeful that Bangladesh businessmen will receive some good news in this regard soon,” he had said.

Officials said that matter came up for discussions during the meeting of the Joint Study Group (JSG) on Thursday.

India and Pakistan on Wednesday took host of measures to improve trade relations and set a $10 billion bilateral trade target by 2010.

State Bank of India (SBI) and Bank of India (BoI) will set up branches in Pakistan while United Bank and National Bank from Pakistan will commence operations in India.

Both the countries also agreed to jointly file for geographical indication of basmati rice to end the dispute over sale of the rice variety.