Line of Commerce

The people of Kashmir are hopeful that PDP-BJP government, in power in the state of Jammu & Kashmir, will take up local concerns at the national level.
Line of Commerce
File Photo

The people of Kashmir are hopeful that PDP-BJP government, in power in the state of Jammu & Kashmir, will take up local concerns at the national level.

The "Agenda for Alliance" released by the state government in March spoke about many issues, including political and developmental concerns. Yet, one important issue deserves more detailed attention—  the largely unexplored subject of "Cross-LoC Trade". 

In 2008, barter trade commenced across the Line of Control— which divides Indian side and Pakistan side, parts of Jammu and Kashmir—as part of a Confidence Building Measure (CBM) between India and Pakistan; the measure is considered one of the most significant CBMs taken by the two countries in recent history.

This was expected to enhance economic cooperation between the two sides of Kashmir and eventually between India and Pakistan.  Though initially this trade was in the limelight and did serve its purpose, but over the last few years, its benefits seem to have been disillusioned with other "considerations". It is of utmost importance that government looks into cross-LoC trade from the lens of the valley, for them to make astute policies.

In recent years, the term LoC has often being referred to as Line of Commerce and even Line of Cooperation.

This is not surprising as trade volumes have shown a substantial increase despite trade being on barter terms, lack of proper communication channels, absence of a banking system, dearth of legal enforcement of contracts and, limited number of trade days and tradable goods. LoC trade has expanded from USD 0.3 million in 2008-09 to USD 97.2 million in 2011-12 

My interaction with traders makes me feel that there is tremendous zeal amongst people on both sides to further cross-LoC linkages.

Trade across the LoC would serve as a source of employment, especially for the local youth. Such linkages would also offer Kashmiris an opportunity to reunite and associate with family members and friends, despite being on opposing sides of the LoC line.  The development of cross-LoC trade should, thus, be a major prerogative of the PDP-BJP alliance as this trade offers a host of economic prospects to the state, in terms of employment generation, revenue generation and, contributions to state GDP. 

In addition to basic measures— increasing the number of vehicles, increasing the tradable commodities, promoting tourism and travel, fostering communication amongst people from both sides, encouraging greater stakeholder engagement—required to give LoC trade a boost, it is important to retain and preserve the character of the initiative. Conferences, consultations and talks focused on promoting Cross-LoC trade usually dwell on the aforementioned measures but overlook the need to make the people of Kashmir feel that the government recognizes the importance of this trade. 

Undoubtedly, the last six-decades' politics on Kashmir has had tremendous human and economic cost. Cross-LoC trade deserves serious and immediate attention because the short and long term impact of trade across divided Jammu and Kashmir would have major implications for the region.

Based on my experiences, working on the subject over the years while simultaneously interacting with numerous stakeholders, I am confident that if both national governments give this trade proper focus, it has the potential to reap positive economic benefits to the state and, in the long run, to the two nations. 

At a geo-strategic and micro level, the importance of LoC trade needs to be understood in the context of the free flow of trade raising prosperity levels of people on both sides of the LoC and enabling them to become key stakeholders in the peace process. At a macro level, the governments can use this as a means of mitigating the long drawn-out conflict in the region.

Economic benefits have always served as a means of powerful conflict resolution. A peaceful border and neighborhood will ultimately help the development agenda of India. This is also in line with the current government's SAARC agenda and thus should not be neglected.  

Governments on both sides should use the prospering cross-LoC trade to provide the much needed boost to the presently latent India-Pakistan relationship. 

This article is my humble plea to the state and national government to consider the importance of Loc trade and bring it back on the table. 

Afaq Hussain is Director, Bureau of Research on Industry and Economic Fundamentals, New Delhi.

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