New Delhi: India on Thursday said it will consider the possibility of allowing India’s private banks to open branches in Pakistan as both countries move towards normalizing trade relations after decades of strained economic ties.
Commerce minister Anand Sharma expressed satisfaction at the pace at which India and Pakistan were normalizing their trade ties, the ministry said in a statement.
“The Pakistan government has taken some steps to move towards full normalization of trade relations with India by making the transition from a positive list to a negative list for imports from India,” Sharma said.
The steps taken to normalize trade include Pakistan moving from a positive list of goods to be traded with India to a smaller negative list, India allowing foreign direct investment from Pakistan, and both countries initialling a liberalised visa pact that would allow greater freedom for travel for businessmen of both countries.
“This process must be taken to its logical end by phasing out the negative list and eventually according MFN (most favoured nation) status to India,” he said during a meeting in New Delhi with members of the Pakistan Business Council.
Pakistan had announced it was moving from a positive list to a pruned down negative list of goods to be traded with India, which would also be brought down to zero by the end of this year when it accords India MFN status.
When members of the delegation raised the issue of permission for opening more bank branches in the other country, Sharma said: “Let both the countries quickly establish the first two branches and we may also look at the possibility of expanding and bringing in some of our private sector banks. We are open to that.”
The decision to open bank branches was taken earlier this year with Sharma disclosing in April that talks between the central banks—the Reserve Bank of India (RBI) and the State Bank of Pakistan—were under way.
RBI on Thursday declined to comment.