India allows Bangla cos to invest
Economic Times | 29 Dec 2007
India allows Bangla cos to invest
Deepshikha Sikarwar, TNN
NEW DELHI: India has opened its door for investments from Bangladesh by dropping the country from the negative list. The Foreign Exchange Management Act (Fema) has been amended allowing Bangladeshi companies to invest here.
Citizens and companies from Bangladesh and Pakistan are not permitted to make investments as per Fema rules. Sri Lanka, which was also in the negative list, was dropped in 2004. However, the restrictions will continue for investments from Pakistan.
“The government had decided to drop Bangladesh from the negative list and changes to this effect in the FEMA regulations have been notified recently,” an official said. Investments from Bangladesh will, however, be approved on case-to-case basis through FIPB, even for sectors where 100% FDI is permitted on automatic route. Individual investments from the country would continue to face restrictions.
These changes in the FEMA will clear the way for India-Bangladesh bilateral investment promotion agreement (Bipa). The agreement had been held up because of the ban on foreign direct investment from Bangladesh. India had to do away with the restriction as per the proposed investment pact under South Asian Free Trade Agreement (Safta).
Even as India had put Bangladesh on the negative list no such restrictions were imposed on Indian investments in Bangladesh. Indian garment manufacturers have set up companies in Bangladesh. Dhaka had been raising this issue time and again not only in bilateral fora but also at Saarc meetings.
