India said on Friday it would soon welcome foreign direct investment (FDI) 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 at the opening of a second trading gate along the nations’ borders on Friday.
The checkpost at the India-Pakistan border in Wagah was inaugurated by Indian Home Minister P Chidambaram, in the presence of Chief Minister of Indian Punjab, Parkash Singh Badal and his deputy Sukhbir Singh Badal, Chief Minister of Pakistan’s Punjab Shehbaz Sharif, Pakistan Commerce Minister Makhdoom Amin Fahim and Indian Commerce Minister Anand Sharma.
“India has taken an in-principle decision to allow Pakistani FDI (foreign direct investment) in India to deepen our economic engagement,” Sharma said.
The trade minister also said a deal to ease visa curbs on business travel between the South Asian neighbours would be ready “soon.”
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 jewellery, 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.
Former governor of State Bank of Pakistan Ishrat Husain said on Friday he saw huge prospects for bilateral trade with India with both the countries taking steps to allow larger flow of goods.
Husain said he hoped that by December Pakistan would remove 1,200 items from the negative list to ensure that all items are traded between the two countries. Husain was talking to reporters on the sidelines of a ceremony to sign MoU with the Indian School of Business (ISB) to offer executive education in Pakistan.