MHA has issued orders to suspend the LoC trade in Jammu & Kashmir w.e.f 19th April. This action has been taken as the Government of India has been receiving reports that the Cross LoC trade routes are being misused by the Pakistan based elements for various anti-national activities.
About LoC Trade
- It is meant to facilitate the exchange of goods of common use between local populations across the LoC in Jammu & Kashmir
- The trade is allowed through two Trade Facilitation Centres located at Salamabad & Chakkan-da-Bagh.
- The trade takes place four days a week.
- Trade is based on the Barter system and zero duty basis.
Concerns Raised In The Reports
- Trade has changed its character to mostly third party trade and products from other regions, including foreign countries such as U.S.-origin California almonds, are finding their way through this route.
- Conduit for Hawala & Drugs: Unscrupulous and anti-national elements are using the route as a conduit for Hawala money, drugs, and weapons, under the garb of this trade.
- Association with Terrorist Organisations: It is being operated by persons closely associated with banned terrorist organizations involved in fuelling terrorism/separatism.
- Control of Militant organizations: Some individuals, who have crossed over to Pakistan, and joined militant organizations have opened trading firms in Pakistan. These trading firms are under the control of militant organizations and are engaged in LoC trade.
- Circumventing the withdrawal of MFN status to Pakistan: Inputs have been received that in order to evade the consequent higher duty, LoC trade is likely to be misused to a much larger extent.
Consequences of Trade Ban
- Unemployment: It is estimated that since the trade commenced across the LoC in 2008, employment to the order of more than 1.6 lakh days had been created which now has become uncertain and lost.
- Weakened confidence-building mechanisms: Trade across LoC began as a part of Kashmir-specific CBM to enhance people to people contacts and strengthen relations between border communities and between the countries per se.
- Further Marginalisation of Kashmiris: Such abrupt decisions which leave no alternative livelihood opportunities to many, adversely affect the mindset and perceptions of locals especially when they already are witnessing trust-deficit with respect to the Indian State.
- Worsened India - Pakistan Relations: Trade across the border was meant to soften boundaries and open channels of communication, interaction, and dialogues which implicitly reduces strain in relationships.
- Stricter regulatory & enforcement mechanism: Solution to violations of a trade agreement is to enforce the rules stringently, not stop the exchange of goods and put at risk the livelihood of countless people on both sides of the LoC.
- Leveraging Technological & Innovative Solutions: For Example, Procurement of Truck Body Scanners would ensure easy detection of contraband currency, drugs, and arms.