Nearly a month after India withdrew the Most Favoured Nation (MFN) status granted to Pakistan and imposed 200 per cent import duty after the Pulwama terror attack, Amritsar-based importers who got items from Pakistan through the Attari-Wagah Integrated Check Post (ICP) are miffed with the barter trade that continues at Trade Facilitation Centres along the Line of Control in J&K’s Poonch and Uri.
Importers from Punjab had long been opposing the barter trade and after the 200 per cent import duty made imports unviable from the Attari-Wagah border, they have renewed their opposition. Their grouse is that while they pay duties at the check post, traders from outside evade paying any duties by using barter trade points in J&K. While barter trade was also briefly suspended at a local level following the Pulwama attack, it resumed soon after.
“For instance, a bag of cement valued at Rs 170 and costing about Rs 250 with 0 per cent import duty earlier, now costs about Rs 700 with Rs 340 import duty,” said Indo-Pak Chamber of Commerce and Industry president Pardeep Sehgal. He called the barter trade in J&K a “big farce” where “outside traders were using locals to do trade”.
Sehgal said importers at Attari the ICP were not keen to accept consignments which crossed over to the Indian side of ICP around February 16, when the notification to impose 200 percent import duty was issued.
Traders from India primarily import cement, gypsum, dry dates and some other items from Pakistan through the ICP. Pakistan allows 138 items which can be exported from India through the Attari-Wagah ICP. There are no restrictions from India on imports from Pakistan through this land route. Spices and dried dates are among items usually exchanged in barter trade.
An official said that last year, the import trade volume from Pakistan at Attari ICP was worth Rs 1,200 crore and the government earned a revenue of nearly Rs 400 crore in various duties and taxes. The official said that imports from Afghanistan last year were to the tune of nearly Rs 1,800 crore. Dry fruit is among the major items Indian traders import from Pakistan.
TFCs were opened around 11 years ago as a confidence building measure between India and Pakistan. The focus area was to encourage trade of items produced on either side of Kashmir. While trade at ports like Attari ICP is regulated by the ministry of finance, barter trade at TFC is regulated by the ministry of home affairs.
It is not only the traders from Punjab who are crying foul over the barter trade, an official also said that items like dry dates had been making their way to India through TFCs in Jammu and Kashmir when MFN status to Pakistan was in place and government had been losing on revenue as no duty was charged there.
However, the scale of trade at TFCs is comparatively lesser as compared to the Attari-Wagah ICP. At barter trade points, a maximum of 35 trucks are generally allowed. At ICP, 150-200 trucks used to cross over, said an official.
Confederation of International Chamber of Commerce and Industry functionary and leading businessman from Amritsar Rajdeep Uppal said that the “problem originated from J&K and its border”.
“There was a report by the National Investigation Agency (NIA) about six months ago that barter trade was being used for unlawful activities. Despite this, it continues. When it comes to national security, we are 101 per cent with the nation. I wonder why barter trade continues when the entire country stands by the government. Is Kashmir not a part of India that they are dealing with Pakistan when we are not?” he asked.
Gunbir Singh, president of Amritsar-based NGO Dilbir Foundation and former chairman of the Confederation of India Industry, said barter trade earned no revenue for the government and was free for all. “What was supposed to be trade of Kashmiri goods is today free for all. Traders from Gujarat and Maharashtra are routing their items through barter trade points,” said Gunbir.
“There was $ 2.4 billion worth of trade between India and Pakistan. A sizeable portion was through Wagah. The imports at Wagah have come to a standstill after imposition of 200 per cent duty. It is going to have a humongous effect. There will be unemployment in the border area. A lot of productive capital is always lying waste. A large quantity of goods is blocked at ICP,” said Gunbir.
“I understand that Pakistan should be penalised and not be taken lightly for all the bloodshed. But the fact of the matter is that we need to keep in mind that only if you have fiduciary bonds between people and financial interests involved can there be a way forward,” said Gunbir.
Sehgal said nearly 100 importers were affected after imports stopped from Pakistan through the Attari-Wagah ICP. “In the days to come, it will impact the economy of the entire border belt. There would be net loss of the border economy to the tune of Rs 15 to 20 crore in a month. Importers, clearing agents, those in transport business, truck drivers, coolies, all will be affected,” he added.