India on Wednesday decided to allow foreign direct investment from Pakistan in a move to boost bilateral economic relations.

"The government of India has reviewed the policy...And decided to permit a citizen of Pakistan or an entity incorporated in Pakistan to make investments in India, under the government route, in sectors/activities other than defence, space and atomic energy," an official statement said.

Sources said in order to address the security concerns, FDI proposals from Pakistan would be routed through the Foreign Investment Promotion Board (FIPB).

The government had earlier allowed investments from Bangladesh under the FIPB route. (PTI)