LoC Trade

Of business, politics and the challenges in the way



India believes in maintaining friendly relations with global world especially with neighboring countries including Pakistan. For maintaining cordial relation with Pakistan a number of initiatives have been made by GoI which includes LoC Trade in J&K State as well. Trade is bound to develop between people of two neighboring countries or borders. Owing to proximity and socio-cultural and ethnic relations, the economic linkage and dependability develop automatically for the mutual benefit of the people of borders. Such trading activities have been traditionally going on in most of the border areas of the neighboring countries of the world. Various physical, political and environmental conditions of the neighboring countries or borders, however, govern or decide the intensity, volume and nature of the cross-country or cross-border trade. India’s trade links with its neighboring countries are centuries old. The history of trade with China and Central Asia could be traced back from the ancient Silk Road route since the Roman times. Trade through Nathla Pass accounted for 80% of total cross border trade between China and India in early 1900s. Trade with the East Asian nations through the sea route in the east has a glorious history. Since the partition of India, the events and policy trends have led to distances between India and Pakistan. Nevertheless in terms of history, culture, language and religions, both countries have much in common. Geography has made us neighbor. Lot of such measures have taken place to initiate peace process that could help resolve the political conflict between India and Pakistan and normalize bilateral relations and economic cooperation between the two nations for the betterment and welfare of their masses.
The State of J&K being at the terminal end of the country, along with poor connectivity, constitutes a delicate economy. Opening borders and bringing about economic integration with various regions of the state is a dire need. Being equally seized of the situation, India and Pakistan have developed CBM structures and agreements from the days of their independence. Most of the CBMs were preceded by the wars and periods of high tension. A look at the history of relations over the years shows that India and Pakistan have moved forward on CBMs.
The present LOC trade is also the result of a series of CBMs taken in the past. The Srinagar – Muzafarabad (April -2005) and Rowalkote-Poonch (June -2006) bus services and ultimately the cross border trade was realization of the dreams and aspirations of the people of the divided Jammu and Kashmir. The decision to initiate trade across the LoC was the outcome of a meeting between the Prime Minister of India and the President of Pakistan in April, 2005. Further discussions were held on the subject during the Technical-level talks between the two countries at New Delhi on May 2–3, 2006 as a part of Confidence Building Measures (CBMs). At this meeting, it was agreed that the Cross LoC trade would be by way of truck services; the list of items for trade would be identified; and the exchange of delegations between the Chambers of Commerce on both sides would be facilitated.
Meanwhile, the process of holding Round Table Conferences on Kashmir was initiated by the Prime Minister of India in 2006. One of the five Working Groups constituted during the second Round Table Conference was the Working Group on strengthening of relations across LoC. This Working Group recommended increasing Cross LoC movement and interaction among people on both sides, including commencement of Cross LoC Trade. An Oversight and Monitoring Committee (OMC) was set up under the chairmanship of the Union Home Secretary to study the recommendations made by the various Working Groups for its implementation in respect of Cross-LOC Trade. The Ministry of External Affairs (MEA) pursued the main recommendations with the Government of Pakistan, whereas the Ministry of Home Affairs (MHA) pursued the issue of creation of the requisite infrastructure at the crossing points in Jammu and Kashmir. In the meeting of the Inter-Ministerial Committee and the State Administration held at Srinagar on June 16 2008, it was decided to develop Land Customs Stations (now Trade Facilitation Centres) for Uri-Muzaffarabad Trade Route at Salamabad & for Poonch-Rawalkote Trade Route at Chakkan-da-Bagh. The State Govt. was asked to identify suitable land for the purpose after getting the specifications and requirements of the Customs and other Central Agencies. Accordingly, land was identified and acquired by the State Government at both the places. Temporary infrastructure was put in place at Salamabad and the bare minimum permanent infrastructure was put in place at Chakkanda-Bagh out of the resources of the State government after consultation with the Central Government. The Trade Facilitation Centers are now being funded by the Ministry of Home Affairs/ Government of India where under Rs.20.00 crore (i.e. Rs.10 crore for each TFC) have been received by the State Govt. under non-plan scheme of SRE (police) as one time exception). Subsequently administrative approval for creation of infrastructural facilities at TFC Salamabad (Uri) and Chakkan-Da-Bagh (Poonch) at an estimated cost of Rs.8.95 crore and Rs. 7.95 crore resp. has been accorded. As on date, Rs.7.95 crore and Rs.3.00 crore have been released for works that are being under taken at TFC Poonch and TFC Salamabad respectively. The modalities of the Cross-LoC Trade were drawn up and the list of items to be traded across the LoC was finalized in the meeting of the Joint Working Group held in New Delhi on 22.9.2008 and the necessary infrastructure for launching the Cross-LoC Trade was put in place both at Salamabad & Chakkan-da-Bagh.
Ultimately the Cross LoC trade started on 21.10.2008 with 13 vehicles carrying goods from Salamabad to Chakoti and 14 vehicles coming in from Chakoti to Salamabad carrying goods from across the LoC. Similarly, 03 vehicles carrying goods from Chakkan-d-Bagh crossed the LoC to Rawlakote on 21.10.2008 and 04 vehicles carrying goods from across the LoC came to Chakkan-da-Bagh. Previously, the duty free Cross-LoC trade was carried on Tuesdays & Wednesdays on both routes in 1-1.5 ton capacity trucks. Recently, both sides agreed to increase the number of trading days from 2 to 4 days per week. The movement of the goods now takes place on Tuesday, Wednesday, Thursday and Friday through both the Trade Facilitation Centers.

(Dr. Bilal Ahmad Khan R/O Halmatpora (Kupwara) is Ph.D in Economics)

Lastupdate on : Mon, 24 Dec 2012 21:30:00 Makkah time
Lastupdate on : Mon, 24 Dec 2012 18:30:00 GMT
Lastupdate on : Tue, 25 Dec 2012 00:00:00 IST

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