Foreign Direct Investment (FDI) from Pakistan will pave way for increased trade, commerce and economic integration between Pakistan and India, said Lahore Stock Exchange (LSE) Managing Director and Secretary General of South Asian Federation of Exchanges (SAFE) Aftab Ahmad Chaudhry here Monday.
He said, "Pakistan should make a policy for allowing Indian FDI and portfolio investments from India." He said that the restriction on the directorship of an Indian origin person in a Pakistani company has to be done away with while the intricate process of clearance for the foreign directors in the Pakistani companies has to be made easier so that the Indian companies and investment houses can take equity and management stake in the domestic companies of Pakistani.
Aftab stated that South Asian Federation of Exchanges has long been calling for the removal of restrictions on bilateral investments of all kinds between the two Nations. He said that foreign direct investment and portfolio investments are the best ways to create peace and harmony between the Nations and it was high time that both countries moved forward toward an investment liberalisation environment.
He said that the investment permission from Pakistan would be extremely beneficial for such trading and manufacturing companies which would like to have a marketing presence in India for their goods and services. He also said that the equity market in India is trading at a higher multiple and there may not be much inflow into the Indian stock market from Pakistan. On the other hand, he said that if Pakistan reciprocates with the same investment liberalization initiative, then the chances are that Pakistan's corporate and stock market sector would see sizeable investment from India.
Aftab also said that Pakistan also needs to make a policy regarding the sectors which could be off limit for the Indian investment. He said that defence, aviation, ports & communication and mining sectors could be some areas about which the Pakistani policy makers may decide to restrict investments from India. However, he said that the Indian financial, manufacturing, consumer goods and oil and gas sector companies may be eager to invest in Pakistan at the first possible opportunity.
The LSE MD said that SAFE is planning to organise an Indo Pak Finance and Economic Summit under "Aman ki Asha" banner at Mumbai later this year. He said that the economic liberalisation environment would be very conducive for the successful holding of the forthcoming Summit where we plan to showcase a number of growing and emerging companies and sectors for investment in Pakistan.