The announcement follows on the heels of an Aug 1 decision by the Indian commerce ministry to overturn its ban on foreign investment from Pakistan.—File Photo

MUMBAI: India’s central bank will allow domestic entities to invest in Pakistan if they apply for the bank’s approval, the Reserve Bank of India said in a statement on Friday.

Previously, Indian entities were not allowed to invest in neighbouring Pakistan.

The move follows on the heels of the Aug 1 decision by the Indian commerce ministry to overturn its ban on foreign investment (in industrial ventures) from Pakistan — a move designed to build goodwill amid a renewed push for a peace settlement between the two neighbours.

Later the same month, the Reserve Bank of India (RBI) also opened up doors to Pakistani citizens and entities to invest in shares and convertible debentures of Indian companies under the Foreign Direct Investment Scheme.

The Indian decision to accept the FDI from Pakistan was taken in April this year when the two trade ministers met in New Delhi and was thought to be in response to Pakistan’s decision to grant India the `Most Favoured Nation (MFN)` status by the end of the year.

The developments are believed by traders and investors to help tackle troublesome issues such as Kashmir, which has soured relations between the two countries since their creation 65 years ago.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.