SRINAGAR, April 7: When cross-LoC trade began in October 2008, it was hailed as one of the biggest confidence building measures between India and Pakistan. But three and-a-half years later, the initiative is struggling to keep itself going even as the two countries are taking steps for greater economic cooperation, and Pakistan is all set to grant most favoured nation (MfN) status to India.
“Trade through the LoC continues to be symbolic and political in its intent,” says Mubeen Shah who heads the Jammu and Kashmir Joint chamber of commerce and Industry, effectively the first cross-LoC institution between the divided parts of the state. “There has been no effort to enhance its economics.” Shah has been busy meeting central and state government officials to get the number of trading days increased from four in a week, and to allow 350 trucks a week from the current 200. The limitations, he says, are crippling.
With MfN set to boost trade manifold through Wagah, Mubeen wants the two countries to also work to increase the scope of the trade. But traders in the state have several fears.
“We fear without a simultaneous effort to expand trade through LoC, it is destined to remain stuck as cross-Kashmir affair,” says Mubeen. “Besides, if the items routed through LoC are also allowed to be traded through Wagah with lower tariffs and all the benefits of international trade, it will adversely affect trade in Kashmir.”
Cross-LoC trade is allowed through the two transit points between Uri-Muzaffarabad and Poonch-Rawalakote. Trade across the routes was revived after 61 years following an extended dialogue between the two nations. currently, 21 items are being traded, which also have to be consumed within the divided state. It is illegal to transport them to other parts of India and Pakistan or to other countries.
The trade arrangement followed the re-opening of the Srinagar-Muzaffarabad Road in April 2005. But the modalities worked out for trading at the time have hardly been built upon. Trade continues to be impeded by the barter of goods, lack of communication, no banking channels, deficient legal contract enforcement, limit on tradable goods, structural difficulties in free movement and other barriers.
“It continues to be a loosely structured trade,” says Ashiq Hussain Kira, a J&K Bank executive, who has done research on the cross-LoC trade. “Now is the time to revise its terms and expand it beyond 21 items.”
Shakeel Qalander, a prominent businessman and a former president of the federation chamber of Industries, Kashmir, has three immediate demands to make trade productive.
Currently, 21 items are being traded, which have to be consumed within the divided state
First, to revise the list of tradable items upwards from the current 21 items and to include all goods and services “produced and manufactured” in J&K. Second, to allow all the items that will be traded across Wagah, where custom duty will not apply after the enforcement of the new MfN regime, to also be traded through LoC. Thirdly, to allow the goods being traded to move beyond Kashmir on both sides.
Anil Suri, chairman, federation of Industries, Jammu, also wants replacement of the primitive barter system with the back-up of banking and establishment of proper communication channels between the two Kashmirs. “The situation now is that if I send a carpet from here, I will get onions in return. This makes no sense at all,” says Suri.
Naeem Akhter, chief spokesman of the opposition PdP, sums up the mood in Kashmir: “Kashmir has to benefit from enhanced trade relations between India and Pakistan.”
Akhter says evolution of the cross-LoC trade is the antithesis of what had been envisaged when it first started. “Trade between two Kashmirs has a grand objective. It is like azadi from Kashmir, azadi from siege,” he says.