United in trade

The settlement of the Kashmir dispute may be uncertain, but seven years of trade across the Line of Control has united the people of Jammu and Kashmir in commerce, turning the LoC into the Line of Commerce. Trade across the fence has brought some relief in the otherwise tormented lives of the Kashmiri people.
Bananas, cumin and herbs are pouring into Azad Kashmir from across the LoC while mangoes, almonds and moong lentils are going from this side to Indian-occupied Kashmir. While traders reaped profits of the barter trade, thousands of Kashmiris on both sides got employment.
Importantly, neither of the two countries ever suspended the Kashmir trade except for temporary interruptions on a few occasions due to situations arising out of violations of ceasefire along the LoC. This is despite the fact that bilateral ties between India and Pakistan are on a downhill journey since the Mumbai attacks in November 2008.
On October 21, 2008, cross-LoC trade was initiated as a confidence-building measure amidst topographical disadvantages, absence of proper infrastructural and communication facilities; Kashmiri traders grabbed the opportunity. According to official data, both sides of Kashmir have traded with each other goods worth at least Pak Rs72 billion ($699 million) during the past seven years.
In the limited and controlled business environment on the basis of barter, the Kashmir trade has made steady progress. In the first year, 464 trucks from both sides crossed the border via two trade points (Chakoti-Uri and Chakkan Da Bagh-Poonch) on the LoC. This number has grown by 28 times to 12,905 in the seventh year.
In 2014-15, according to official figures, the total value of goods traded was around Pak Rs16.2 billion ($164.5 million) – a phenomenal growth from a modest value of Pak Rs60 million ($0.77 million) in 2008-09.
Commercial interests have cut across the religious divide, bringing Kashmiri businessmen belonging to different religions – Hindus, Sikhs and Muslims – together. Hindu members of the LoC Trade council in Jammu and Kashmir are on record as saying that traders should be allowed to visit markets (mandis) across the border to increase the trade volume.
Economies of both India and Pakistan have benefitted from the LoC trade. A popular item of trade in Indian-held Kashmir is the moong lentil which mainly comes from Sindh. Similarly, almonds exported from Azad Kashmir to Indian-administered Kashmir come from Balochistan and mangoes from southern Punjab. Similarly, coconut imported in Azad Kashmir originates in Kerala.
In order to strengthen and promote LoC trade, India and Pakistan need to remove numerous hurdles in the way of traders. At present, trucks with imported goods are unloaded and re-loaded for security checks at the trade facilitation centres which results in degradation of goods’ quality such as fresh fruits.
In order to avoid this hassle, truck scanners should be installed at these points, which is quite feasible for the government-run Travel and Trade Authority (TATA) that charges a handsome fee on the traded goods.
Also, not a single wholesale market (mandi) exists in Azad Kashmir which makes purchase of items to be exported expensive and cumbersome for traders as they have to shop at markets in Rawalpindi and Lahore. The trade authority needs to expedite its plans for setting up two wholesale markets in Azad Kashmir.
It has been a long-standing demand of the Kashmiri traders on both sides that India and Pakistan should allow registered traders frequent and hassle-free travel across the LoC. Ease in travel is required for traders to inspect quality of goods they are importing. Except a few odd incidents LoC trade has not led to any security compromise so there should be no reservation in granting a liberal travel regime to traders.
The two governments should also expedite the process of banking facilities for LoC traders at trade facilitation centres and other business centres like Srinagar, Jammu, Muzaffarabad and Mirpur. Communication issues have already been resolved by internet applications such as Whatsapp.
The import of certain duty-free items via LoC such as coconut from Indian-held Kashmir put regular importers at disadvantage because their imports are taxed with customs duties. The government should estimate the need of such items in Azad Kashmir and allow their duty-free import up to a certain quantity via the LoC instead of banning them entirely.
It is natural that big importers and exporters in Pakistan and India are somewhat uncomfortable over duty-free trade across the LoC which can assume the status of smuggling and thus hurt regular trade. The two governments need to strike a balance between the interests of regular trade and trade between Kashmir.
In order to review and resolve such matters, there is need to hold regular meetings of the India-Pakistan Joint Working Group for cross-LoC CBMs. It was decided that the working group would meet every three months to review progress on trade, revise list of trade items on basis of market assessment and address issues emerging in between intervals. This did not happen; the group has met only once in seven years.
The growth and resilience of trade in Kashmir over the last seven years has demonstrated its economic and peace-building potential. It is for the governments of India and Pakistan to build on this foundation.
The endurance of LoC trade represents the strong urge of people living in the two parts of Jammu and Kashmir to come together as a unit, which they had been for centuries before the division of the state. Trade, then, is a step towards the unity of divided Kashmir.
Email: adnanadilzaidi@gmail.com