Department of Industrial Policy and Promotion(DIPP), vide Press Note No. 3(2012 Series) dated 1st August, 2012 reviewed the FDI Policy and decided to permit a citizen of Pakistan or any entity incorporated in Pakistan to make investments in India, under the Government route, in sectors/activities other than defence, space and atomic energy.
In March 2012, Government of Pakistan replaced its ˜Positive List™ comprising 1947 items that could be exported by India to Pakistan with a ˜Negative List™ of 1209 items. This implies that except for these 1209 items, all other items can be exported from India to Pakistan. Such substantial increase in tradable commodities is expected to reduce trade through third countries. It is expected that exports in sectors such as agricultural produce, chemicals, textiles, auto components could be enhanced through bilateral investment.