India removes ban on Bangladeshi investments

Dhaka, Dec 29 (BDPREM) — India has upheld the spirit of Saarc by withdrawing its ban on Bangladeshi investments, FBCCI administrator and leading businessman Manzur Elahi said Saturday. "The business can't be done in a one-way track. It is a good gesture from India," Elahi, who was appointed to the country's apex trade body this month following expiry of the elected committee, told bdprem. However that he is yet to know the progress officially, the Federation of Bangladesh Chambers of Commerce and Industry administrator added. India has opened its door for investments from Bangladesh by dropping the country from the negative list recently, The Economic Times reports Saturday. The report said the country's Foreign Exchange Management Act has been amended allowing Bangladeshi companies to invest there. These changes in the Fema will clear the way for India-Bangladesh a bilateral investment promotion agreement. 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. Individuals and companies from Bangladesh and Pakistan had not previously been allowed to make investments as per India's Fema rules. Sri Lanka was dropped from the negative list in 2004. However, the restrictions will continue for investments from Pakistan. The newspaper quoting an Indian official as saying: "The government had decided to drop Bangladesh from the negative list and changes to this effect in the Fema regulations have been notified recently." Investments from Bangladesh will be approved on a case-to-case basis, even for sectors where 100 percent FDI will be routinely permitted. Investments by individuals will continue to face restrictions. "Indian companies invest here and earn a lot. They promote their products in advertisements, but Bangladesh has not been allowed to do so there," Manzur Elahi said. He said India has now made the investment scenario reciprocal, but he sees rare possibilities for a Bangladeshi company to invest in a major market like India. Although India had put Bangladesh on the negative list, no such restrictions were imposed on Indian investments in Bangladesh. Indian garment manufacturers, for example, have set up companies in Bangladesh. Dhaka had raised this issue time and again not only in bilateral forums but also at Saarc meetings.