India withdraws ban on Bangladeshi investments

India will allow investment from Bangladesh dropping its name from a list which India prepared due to security concerns, leading financial daily The Economic Times reported yesterday.
The Foreign Exchange and Management Act (FEMA) has been amended allowing companies of Bangladesh to invest in India, it said quoting an unidentified official.
"The government has decided to drop Bangladesh from the negative list and changes to this effect in FEMA regulations have been notified recently," the official was quoted as saying.
India's Foreign Investment Promotion Board (FIPB) would approve investments from Bangladesh case by case, even for sectors where 100 percent direct foreign investment is permitted through an automatic route, The Economic Times said.
However, curbs on individual investments from Bangladesh would continue, it added.
The changes in FEMA are expected to pave the way for an investment promotion agreement between India and Bangladesh, which had been held up due to the ban on investment from Bangladesh.
India had to remove the restrictions as per the proposed investment pact under the South Asian Free Trade Area (Safta).
The Indian decision came after Bangladesh raised the issue repeatedly both at bilateral and multilateral forums.
Citizens and entities from Bangladesh and Pakistan have so far been barred from making investment in India as per the FEMA regulations. Sri Lanka, which too was in the negative list of countries in this regard, was excluded three years ago. However, the restrictions on investments from Pakistan will continue.