Tricks in LoC Trade

The fanfare accompanying the start of cross-LoC trade had raised expectations of the commercial initiative growing over time, but the results, five years down the line, are dismal. Both, in terms of value and volume, the trade is static, despite market studies – corroborated by facts on the ground – indicating its substantial potential for either side of divided Kashmir.

It would appear that this important component of engagement has been held hostage by official apathy and antipathy in India as well as Pakistan. The manner in which the operation was halted for over three weeks in the beginning of the year over the issue of reported drug smuggling gave the distinct impression that authorities were looking for a pretext to create hurdles.  The smuggling case could have been handled as a regular police and investigation matter without holding up trade activity. And even when it was allowed to resume after 25 days, the number of trucks was slashed by half, restricting it to twenty-five a day instead of the previous fifty.

 Ironically, the suspension had come just a day after India and Pakistan agreed to keep their border crossing at Wagah open round-the-clock for commercial exchanges between the two countries. Powerful lobbies based in Amritsar and Lahore do not want cross-LoC trade to realize its potential and have been trying from day one to kill it.  Conducted solely on the barter system, commerce between the two parts of Kashmir forms a minuscule percentage of trade between India and Pakistan which crossed $2.6 billion in 2013. The total value of the LoC component since it started in October 2008 has been less than $324 million.

Further, the list of 21 tradable items included in the memorandum of understanding (MoU) too is being curtailed on one pretext or the other. The problem of communication, the lack of banking facilities and security issues are yet to be resolved. Traders’ demands of installing whole-body truck scanners at crossing points, which would make security checks foolproof and restrict damage to commodities like fruit and vegetables, too have not been met.

Cross- LoC trade was begun only after demands grew loud for opening historical links to the landlocked Valley. Instead of taking the initiative further to connect to West and Central Asia as alternative markets for Kashmir’s produce, governments seem intent on killing even the puny beginning.