In a bid to give a big boost to trade and bilateral relations and enhance economic cooperation, the Union government on 01AUG12 notified a law permitting investments by Pakistan citizens and companies in India in sectors/activities other than defence, space and atomic energy.
Pakistan was the only country in the negative list under the Foreign Exchange Management Act (FEMA), which prohibits investments in India. Sri Lanka was removed from the list in 2006 and Bangladesh in 2007.
Officials in the Industry Ministry said that in order to address the security concerns over investments from Pakistan, FDI proposals from Islamabad would be routed through the Foreign Investment Promotion Board (FIPB), which is headed by the Economic Affairs Secretary in the Finance Ministry.
