Allowing Pakistanis to invest in India is a good reciprocation to the existing allowance for Indian investors to invest in Pakistan. But, the real hindrance is the Ministry of Interior in Pakistan and its counterpart, the Home Ministry in India, for the lack of investment seeping across borders. The well-known Tata Group of India wanted to have an auto-assembly line in Pakistan during Musharrafs regime when the local economy was thriving, but was refused on administrative grounds by the then government. Given that, what is the surety that Mansha or the likes are going to be welcomed by Indians for merely legally opening foreign investment? The real benefit that can be accrued to our economy is by letting, facilitating and incentivising giant Indian groups to come and pour capital in Pakistan. Think about the Tata Group coming in Automobile and IT sectors; the Ambani Brothers putting up refineries here and so on and so forth. This can create jobs and consumer surplus here by having goods and services at a price lower than what is being produced domestically. Then, all the machineries in our Textile and other exporting industries can be bought at an economical rate relative to the rate at which we are purchasing from the West. Similarly, social surpluses can be gained in the health and technical education sectors. We can have drip irrigation and spillovers of better agricultural technology from across the borders in Punjab and Sindh from India. Half of the power sectors woes can be resolved in no time by allowing Indian power plants to operate here in Pakistan. The list goes on and benefits to Pakistan from a much bigger and advanced economy are countless. Nonetheless, we should commemorate the legalising of Pakistani foreign investment in India. This is going to help our value-added textile sector and we may see the opening up of outlets like J., Sana Safinaz, Chen One, etc., in India. Its going to be an amazing step in cultural amalgamation and acceptance of Pakistani talent in India. But the quantum may be just a fraction compared to what India can bring into Pakistan. The best this step can lead to is opening of banking channels across the borders. Mian Mansha has repeatedly been talking about opening up MCB Banks branches in India. We can expect the Reserve Bank of India and other Indian banks doing the same here. At this point, no bank from either side is allowed to do any banking operations across the border. A Pakistani bank cannot open a letter of credit in an Indian bank and vice versa. They have to route it through a third party and foreign banks like Standard Chartered Bank operating in both countries are benefiting from such frictions at the cost of local banks. Both Pakistan and India need to do away with these frictions dominated by the Khakis here and Home Ministry there. We should be much more open in giving visas to each other and should encourage any investor to go across the border while also keeping spy agencies at bay from the investors. We have to get over the hang ups!
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