On October 21, it will be seven years since the beginning of trade across the Line of Control (LoC) in Kashmir. On the face of it, not much has been achieved by the institutionalization of cross-LoC trade, but the fact is that in absence of the proper mechanism required for such a trade, and continued hostilities between India and Pakistan, it has managed to continue. For most of the period after the 2008 Mumbai attacks, shells and bullets have been the only means of communication between the two sides. Today, when the two countries have literally stopped mutual dialogue, this process – started as a confidence building measure after the 2003 ceasefire – is a promise of hope.
Cross-LoC trade was the second CBM launched after the historic resumption of a bus service between the two parts of divided Jammu and Kashmir on April 7, 2005. The Srinagar-Muzaffarabad and Poonch-Rawlakot bus service heralded a new dawn not only in the battered relations between two bitter neighbors, but also came as a relief to tens of thousands of divided families living on either side. Not much has been done to improve the bus service either, but despite a long and cumbersome procedure to secure a permit to travel on these buses, nearly 25,000 people have benefitted from the service in over a decade. It has been upgraded from a fortnightly service to a weekly one, and the permits once issued can now be used thrice in a year.
Like the bus service, the conditions for productive trade have always remained elusive given the tense relations between India and Pakistan. But the project, having a huge symbolic and emotional value, has survived. The shadow of hostilities continue to hover above it, and controversies ranging from small tiffs between traders to using this route for smuggling narcotics have emerged as a big threat. The trade was suspended from both sides on many occasions, often due to shelling and firing between the two armies.
In the absence of a proper mechanism, banking facilities and other cumbersome regulations, this trade has not stopped. Only in five months from April to August 2015 a trade of Rs 288 crores has been recorded from Indian side, and Rs 196 crores (in Indian currency) from the Pakistani side. The total trade turnover since October 2008 has been put at Rs 1,735 crores from Indian side and Rs 1,557 crores (in Indian currency) from Pakistani side, according to official figures.
Although agreed on in 2004, cross-LoC trade only became a reality in 2008, in the wake of weeks-long protests and strikes during the Amarnath land row in India. As the trade bodies in Jammu announced an economic blockade, the traders in Kashmir chose an emotional recourse by demanding the re-opening of traditional trade route via Muzaffarabad. Subsequently, a joint call of “Muzaffarabad Chalo” was given, and many people, including a senior separatist leader Sheikh Aziz, were killed in police firing when the procession was stopped near Sheeri on Srinagar-Muzaffarabad Road. New Delhi’s position became precarious, and to address the brewing resentment, they moved unilaterally to give final shape to the cross-LoC trade project. It was on September 22, 2008 when Prime Minister Manmohan Singh met Pakistani President Asif Ali Zardari on the sidelines of the United Nations General Assembly session in New York. The two leaders issued a joint statement saying that the routes would open on October 21.
The trade began with 21 items consisting of primary commodities. It was to be conducted twice a week, and only 25 trucks were allowed to cross each of these two days. In July 2011, it was extended to four days per week and 100 trucks from each side (later increased to 200). It is a ‘zero-tariff’ trade, exempted from customs and tax duties. A Joint Working Group established the modalities.
An Indian truck driver sleeps as he waits for the reopening of the Line of Control in Poonch in 2013
Without communication, the trade is virtually blind
But right from the beginning, the trade had been suffering because of basic problems – lack of banking facilities, financial arrangements, communication and access to markets. In the absence of banking, it has become barter trade, with its inherent problems of delays in recovery of money, being affected by volatility of market, and being uneven. The business is virtually blind without a proper communication system (although there is a restricted phone facility on the Indian side) and without access to the market. The traders cannot cross the LoC to explore the market or to assess the quality of goods being ordered. Not much has been done to change that.
Amid allegations and counter-allegations between New Delhi and Islamabad, cross-LoC trade has always remained under threat. While the officials in Delhi blame Pakistan for not agreeing on a banking facility, Islamabad has apprehension that this may alter the disputed character of the Kashmir problem. At the same time, strong trade lobbies in India and Pakistan have been working together to fail this trade, going to the extent of calling it illegal.
In 2008, Haseeb Drabu, the current Finance Minister of Indian-administered Jammu and Kashmir had given a formula to make the trade more productive. The Drabu formula on LoC trade, as it is known, envisages banking relations, including mutual acceptance of letters of credit, a communication network in order to enable traders to know the rates prevailing on the other side, a transport network, a regulatory network to determine the composition of trade, and a legal network for dispute resolution. “The fact is that we have done the glamorous bit, the front end. The back end, which is a critical thing, needs to be put in place. The success or the importance of this trade will be determined by how critically and how meticulously we manage these five mechanisms,” Drabu had said in October 2008 when a delegation of the Muzaffarabad Chamber of Commerce visited Srinagar to work out the modalities.
Even as traders continued, at an unofficial level, to thrash out differences and remove bottlenecks, and even set up a Joint Chamber of Commerce and Industry, governments failed to recognize it. JCCI is a spectacular achievement of bonhomie with members from Jammu, Kashmir, Muzaffarabad, Mirpur and Gilgit-Baltistan chambers of commerce. It is currently headed by YV Sharma, a former president of Jammu Chamber of Commerce and Industry whose voters are spread in length and breadth of the erstwhile state of Jammu and Kashmir. Notwithstanding the fact that a resolution of political disputes is essential to putting an end to the sufferings that the people have been enduring, such confidence building measures are about changing people’s understanding of one another. They are about changing behavior, thus creating a new context for resolving a conflict. There may certainly be different expectations from such measures in India and Pakistan, their consolidation ultimately helps civil society engagement, which in turn will contribute in creating an environment that would be conducive to an enhanced negotiations process.
The author is a veteran journalist from Srinagar and the editor-in-chief of Rising Kashmir
