Reserve Bank of India vide RBI/2012-13/198 A. P. (DIR Series) Circular No. 25 dated 7th September 2012, has allowed the overseas direct investment by Indian Parties in Pakistan under the approval route.

Earlier, investment in Pakistan was not permitted as per Regulation 6 (2) of the Notification No. FEMA 120/RB-2004 dated July 7, 2004 [Foreign Exchange Management (Transfer or Issue of any Foreign Security) (Amendment) Regulations, 2004.