FDI from Pakistan: Dangerous and anti-national
July 12, 2025
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FDI from Pakistan: Dangerous and anti-national

by Archive Manager
Apr 15, 2012, 12:00 am IST
in General
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SPECIAL FOCUS

Dr Bhagwati Prakash Sharma

The reports of recent approval of the Finance Minister Pranab Mukherjee, on the proposal of the Commerce Ministry, to amend rules under the Foreign Exchange Management Act (FEMA)-1999, to allow Foreign Direct Investment (FDI) from Pakistan are worrisome. Such a decision is seriously flawed and would pose most formidable challenge to the internal and external security of the country. It would prove to be an altogether myopic misadventure to allow FDI from Pakistan, hitherto prohibited under the FEMA rules. Pakistan is even, yet to reciprocate to grant the Most Favoured Nation (MFN) status to India, under the World Trade Organisation (WTO) norms, which India has granted to the Pakistan long back. Pakistan is also having a very long negative list of 1,200 items of export from India. The government of India’s move to open all domestic sectors, except defense, atomic energy and space for FDI from Pakistan would be the most precarious step of the government.

Pakistan has neither the requisite investible funds, nor the technology to bring into India, for any meaningful purpose, except to establish some enterprises solely to hire agents for ISI or jehadi terrorists and separatists. Moreover, Pakistan would attempt to spy, abet terrorism and carry home dual-use sensitive technologies by establishing work stations to hire Indian scientists for all its ostensible and clandestine motives.

This ill fated nod of the Finance Minister Pranab Mukherjee, as reported in the press, to amend the FEMA regulations would pave the way and enable the Reserve Bank of India to notify requisite changes allowing the Department of Industrial Policy and Promotion (DIPP) to issue a press note to allow such investments from Pakistan. As on date, the Foreign Exchange Management Act-1999, which came into existence in the year 2000, by replacing the Foreign Exchange Regulations Act, governs all the forex transactions and bars transactions from Pakistan. The relevant provision reads as “a non-resident entity (other than a citizen of Pakistan or an entity incorporated in Pakistan) can invest in India subject to the FDI policy”.

It would be almost impossible to reverse this decision, once a single penny is invested after the removal of this restriction from Pakistan. And the investment that would come from Pakistan would hardly be of any significant volume to help the government to ease the Balance Of Payments (BOP) crisis looming large, for which the government is desperately in search for fresh investments, which, though harmful in long run, can help to delay the eruption of the BOP crisis little further.

Pakistan would use the FDI route to fund ISI activities, hire jehadi terrorists, organise separatist movements and also terrorist training camps, and bring in ISI agents from Pakistan. Arms from Pakistan would also find an easy way under the disguise of plant, machinery and spares, into the country. ISI agents would have free movement from Pakistan into India and back, even to and from the Bangladesh, China and Sri Lanka.  All the saner sections of the society and vigilant political leaders should rise on this occasion to completely oppose the easing of investments from Pakistan.

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