Yes, abhinav, Pakistan had only to gain from these investments. We welcome investment from all over the world but not from India. I wish the political disputes are settled soon.
Here's another news item in today's newspaper, pointing out the barriers from India in enhancing Pakistan's exports:
Pakistan ties trade with India to resolution of core issues
LAHORE: The government has firmly tied improvement in economic relations with India to the resolution of core disputes including Kashmir as three leading Indian companies – Bajaj Autos, Bharat Hotels and Tata Steel - which had visited Pakistan recently, were politely told off by Pakistani authorities.
Chairman Board of Investment (BoI) Waseem Haqqi confirmed that top Indian businessmen had visited, but were told that business with India was subject to progress on the political front.
“The Indian businessmen came around to explore investment opportunities in fields of hospitality, steel and telecommunications, but they were politely told that unless there is a simultaneous progress on the political front and on the resolution of all outstanding issues including Kashmir, Pakistan cannot open its doors to Indian investment,” said Haqqi.
However, the BoI chairman revealed that the government had allowed a Federation of Indian Chambers of Commerce and Industry (FICCI)-sponsored exhibition, titled “Made in India”, in Lahore in November.
“We have allowed an exhibition but the exhibitors will not be allowed to sell their products, except edibles,” said Haqqi.
Even as things stand now, Pakistan is gaining very little from trade with India. “Our businesses have to cross very high tariff and non-tariff barriers, which puts Pakistan on the receiving end of bilateral trade,” said Haqqi. “Pakistan has brought down duties on around 780 items to an average of 12 per cent to accommodate Indian exports, but Pakistani businessmen have to face around 25 per cent of duties in return, despite the MFN (Most Favoured Nation) status which India has granted us,” he said.
Pakistan’s formal trade with India stands at around US$500 million. The volume of informal trade is also at around same level. “I know there is a lot of pressure from the Indian industry on their government to resolve issues with Pakistan so that the trade and investment be relaxed, but we have a very strong stance on the issue,” said Haqqi.
“We have one of the most liberal and investment friendly regimes in place. Anyone from anywhere can come and invest but as far as India is concerned we have a clear policy,” said Haqqi.
[Daily Times, August 25, 2005]