Residents and companies based out of Pakistan can participate in the commercial coal mining auctions only after approvals from the government.

“A citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment,” a statement issued by the Coal Ministry on Monday said.

The Ministry said even though 100 per cent Foreign Direct Investment is permitted under the automatic route in coal mining and processing activities, it will still be subject to applicable laws.

A clarification to this effect was issued after the government decided to restrict investments from entities registered in countries which share a land border with India. This move follows the recent border dispute with China.