Innovation Line
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Bangla FDI bar off |
NISHIT DHOLABHAI Source: http://www.telegraphindia.com/1080104/jsp/frontpage/story_8741924.jsp |
New Delhi, Jan. 3: India has lifted the ban on foreign direct investment (FDI) from Bangladesh. A 1999 law had barred FDI from Pakistan, Bangladesh and Sri Lanka. But Sri Lanka was exempt in 2000, and with Bangladesh joining the club, Pakistan is the lone country on the hot list. The Indian gesture, pending for some time but notified without fanfare in November, comes at a time a $3-billion-dollar investment proposal by the Tatas is pending with the Bangladesh government. Delhi's sweetener may also help speed up resumption of hilsa imports from Bangladesh. The removal of the FDI restriction is expected to have a salutary impact on bilateral relations that have been steadily improving since an army-backed government took over in Bangladesh. But the Northeast is expected to get more tangible benefits. "The Northeast is where Bangladesh wants to invest in textiles, newsprint, pharma and food processing. Investment is a two-way street. So, this will create the right environment," Jairam Ramesh, the minister of state for commerce, told The Telegraph. Sources said Ramesh had written to minister of external affairs Pranab Mukherjee in February last on the need to "allow FDI from Bangladesh and Pakistan on a case-to-case basis". A part of that objective has been met now. According to the amended regulations of the Foreign Exchange Management Act, a Bangladeshi citizen or an entity incorporated in Bangladesh can now purchase shares and convertible debentures of an Indian company under the foreign direct investment scheme. However, unlike the direct approval for companies from countries like the US, Bangladeshi investors will have to get the approval of the Foreign Investment Promotion Board. Until seven years ago, Sri Lankan companies were also barred from investing directly in India. However, a proposal of a Lankan company, Brandex Apparels, to set up a garment park was approved in 2000. The garment park is coming up in a special economic zone in Andhra Pradesh's Visakhapatnam |
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