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Renu Bala asked: What is the scope of cross-LoC trade and the role of the government in facilitating it?

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  • Priyanka Singh replies: The cross-Line of Control (LoC) trade between the two sides of Jammu and Kashmir started in October 2008 as a result of an understanding reached between India and Pakistan under the Composite Dialogue process. After hectic deliberations, trade was allowed on the Poonch- Rawalakote and the Uri-Muzaffarabad sector. A bus service meanwhile had been underway on both the routes since 2005. The cross-LoC trade is undertaken on a mutually agreed limited list of 21 items. Goods are ferried on trucks that undergo strict security check at designated crossing points along the LoC.

    Though the opening up of LoC for trade elicited high hopes, various factors meanwhile continue to inhibit the broader process. Being solely based on barter system of exchange, there are technical impediments for traders on both sides including lack of banking facilities and channels of communication. As noted, the scope of trade is very limited and demands to enhance the number of trading items from both sides have remained unmet so far. Also, the cross-LoC trade is not totally insulated from the larger complexities of the India-Pakistan relations. The process has been stalled on several occasions and often remained suspended for long periods, at times for months at a stretch.

    The cross-LoC trade was conceived as an experiment to promote greater people-to-people contact, develop goodwill and commonality of interests amongst people on both sides. Though there have been episodic interruptions, trade and travel across the LoC has not discontinued altogether in these years. The cross-LoC movement of goods and people has been part of the confidence building measure between the two countries.

    Since cross-LoC trade routes are located in a sensitive zone, there is much concern on either side regarding the security risks involved. The two countries have battled such reservations and, except certain unpleasant instances of smuggling of narcotics/contraband, so far the security dimension has been managed quite well. Though trade across the LoC continues, more or less on a positive note, there is a need to further expand its scope to realise the full potential of a rather bold, innovative bilateral initiative.

    Posted on April 29, 2016