Restriction on Bangladesh investment in India goes

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M Azizur Rahman
India has lifted its ban on Bangladeshi investments recently.
The Indian authority has amended its Foreign Exchange Management Act (FEMA) to allow Bangladeshi companies to invest there, according to Indian media reports.
"The government has decided to drop Bangladesh from the negative list and changes to this effect in the FEMA regulations have been notified recently," Indian media said quoting an Indian official.
Investments from Bangladesh will be approved on a case-to-case basis, even for sectors where 100 percent FDI is permitted on automatic route.
Individual investments from the country would, however, continue to face restrictions, the Indian media pointed out.
Officials of the Indian High Commission in Dhaka could not be reached for comments on the issue despite repeated attempts Saturday.
Sources said, the removal of the restriction would clear the way for India-Bangladesh bilateral investment promotion agreement, which was being held up because of the ban on FDI from Bangladesh.
As Bangladesh does not have similar restrictions on Indian investments many Indian companies have invested here and are making hefty profit.
Currently, Indian companies have investments in a wide range of sectors in Bangladesh, including ready-made garment (RMG), motor vehicles and chemicals.
Among the South Asian Association for Regional Cooperation (SAARC) member countries, India currently has restrictions on Pakistani investment.
The investment restriction from another SAARC member state - Sri Lanka - was lifted by India in 2004.
When contacted, the President of Metropolitan Chamber of Commerce and Industry (MCCI) Latifur Rahman termed it as a "welcome step."
"This should lead to better understanding and closer economic cooperation between the two countries in future," the MCCI president said.