Nearly seven years after it began, is the cross-Line of Control trade actually a route for India-Pakistan trade minus the usual barriers? The businessmen in Amritsar who trade goods with Pakistan through Wagah certainly think so, and so do many Kashmir-based traders.
The Amritsar traders are upset at what they describe as “illegal” trade across the LoC between the two sides of Kashmir, alleging that it has become a cheap way to trade goods that have origins outside Kashmir. But officials say it is not possible to take a strictly “technical” view of the condition that cross-LoC trade should confine itself to Kashmiri goods and that, as a confidence-building measure, it needed to be given some latitude. They also say that the volumes of cross-LoC trade are not so great as to disrupt India-Pakistan trade channels.
The Amritsar-based Indian Importers Association is mulling legal action against the Centre. On March 28, the association served a legal notice to the Union home secretary, border management secretary, Jammu and Kashmir chief secretary and deputy commissioners of Poonch and Baramulla seeking an interim reply within 15 days and seeking action on their grievances in two months.
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Pradeep Sehgal, deputy chairman of IIA and a leading importer in Amritsar, said traders like himself were paying duties on goods they brought in from Pakistan through other ports whereas the same goods were being imported duty-free over the LoC.
In the absence of banking facilities, cross-LoC trade has been carried out on the basis of barter but traders estimate that goods worth Rs 3,000 crore have been traded so far since 2008. “The barter trade was meant only for the people of both sides of Kashmir separated by LoC. But,” said Sehgal, “it is being grossly manipulated by the traders sitting in different parts of the country who are routing their consignments through the barter trade points.”
Sehgal said items like banana, coconut and red chilli were being traded to Pakistan though those are “not grown” in Kashmir. Similarly, he added, embroidered textile items from Lahore, Faislabad and Karachi and the California almond — “not products of Kashmir area falling on the other side of LoC” — were being traded from Pakistan.
Uri subdivisional magistrate Showkat Ahmad said as there were “not many items in the valley that could be traded”, authorities had no choice but to allow items from other parts of the country and similarly allow items from other cities of Pakistan. He said LoC trade, so far amounting to about Rs 2,500 crore, was “minuscule” compared to the volume at any other single port.
An official at the Centre said it would be wrong to take “too technical” a view of the cross-LoC trade rules, as it would be “limiting” of what was intended as a confidence-building measure. Around 650 traders are registered with the Trade Facilitation Centre at Salamabad, Uri, but only 120 are actually engaged in business.
Hilal Turki, general secretary of the Chikoti-Salamabad Trade Union, said most of the investors are from Delhi or Punjab. “Only 25 per cent traders are J&K residents. Others are only forwarding agents for traders of Delhi and Amritsar.’’ And Ghulam Rasool Bhat, chairman (transport union), Kashmir Valley Fruit Growers Association, said, “Cross-LoC trade has been hijacked by some businessmen outside the state and in Islamabad.”
Cross-LoC trade has had its share of other troubles. In January last year, officials recovered 114 kg brown sugar worth Rs 100 crore from a truck that had come from PoK. Before that, police had recovered weapons and small amounts of drugs from these trucks.
Commanders of local army formations have written several times to the Ministry of Defence for installation of scanners as they feared that militants might use trucks to smuggle weapons, fake currency and contraband drugs through the Kaman route.
Months after trade resumed, a businessman was arrested in J&K for hawala payments to overground workers of a militant outfit in lieu of goods received from PoK.