Srinagar: In gross contravention of rules, non-local traders, from outside Jammu and Kashmir, have been reaping the benefits of cross-LoC trade by putting up proxy fronts. Custodian of the cross-LoC trade, Farooq Ahmad Shah told Kashmir Reader that these non-local traders had paid huge sums of money to locals who have registered firms under their names while actual trade is conducted by businessman sitting outside the state. The rules, however, said Shah, dictate that only a resident of the state can conduct such business with the other side of Kashmir.
Shah said that at present there are 306 active traders of which only 100-odd are actual state subjects while the rest are businessman from Indian states: “These traders pay about Rs 10,000-20,000 for transaction of a truck load in this barter trade to a tout. This does not help the local economy.”
LoC traders enjoy several tax and custom rebates in this system that was set up as a Confidence Building Measure by India and Pakistan for reviving trade between Pakistan-administered Kashmir and Indian-administered Kashmir. Even though a limited number of items are traded through this route, most of the items are non-taxable.
The LoC trade was set up after the mass uprising against the economic blockade of Kashmir by Jammu-based traders in 2008.
In its initial year, the total number of LoC traders registered was 634, which has now been reduced to 306. The reason for this, Shah said, was that while some of them had become inactive, new norms that traders could have only one agency/firm also had an effect since some traders had floated multiple agencies/firms.
As per government norms, a trader could operate only through a single company either in partnership or while being the sole proprietor. Asked what action has been taken against touts and to weed out these bogus firms, Shah, who has been in charge for a couple of months, said his initial focus was to streamline the trade and the process is still on.
“When I took over, the first thing I did was to weed out traders who were running more than one firm. After this screening, we were left with 306 active traders while we cancelled the registration of others. In the next phase, we will make efforts to track down touts and traders who have registered firms under different names but are managed by a single person. To achieve these results is not easy. The traders have already waged war against me,” Shah added.
While many people fronting as traders are going to be affected by Shah’s attempts to enforce rules, a member of the trader’s organisation claimed that there were only a dozen-odd touts.