The Government of India on Wednesday reviewed the policy and decided to permit a citizen of Pakistan to make investments in India, under the Government route.
However, defence, space and atomic energy have been excluded from foreign direct investment (FDI) from Pakistan, it said.
Earlier, any investment from a citizen of Pakistan or an entity incorporated in Pakistan is not permitted.
A non-resident entity can invest in India, subject to the FDI Policy. A citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route, the Commerce and Industry Ministry said in a press note.
A citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space and atomic energy, further added.
Analysts feel that this decision would help the Pakistan government to convince the Most Favoured Nation (MFN) opponents about its trade bargains with India, reports PTI.