Why LOC Trade Suspended?

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Wahid Bhat| Srinagar
Ministry of Home Affairs has issued an order suspending the LoC trade with Pakistan occupied Kashmir through Jammu and Kashmir. The decision to discontinue the trade has been taken by the government in the light of multiple reports citing misuse of trade routes by the Pakistan based elements for funnelling illegal weapons, narcotics and fake currency etc.

The MHA order says that it has received many reports of trade routes being misused on a very large scale. MHA has asserted that the character of the trade along the LoC has changed and third party trade and products and foreign countries have found their way through the route. It has also alleged that the anti-national and unscrupulous elements are exploiting the trade route as a conduit for funnelling Hawala money, drugs and weapons, under the pretext of trade.

“The Government of India has received reports that cross-LoC trade routes in Jammu and Kashmir are being misused by Pakistan-based elements. This misuse involves inflows of illegal weapons, narcotics and currency,” read the notification, a copy of which was also available with Ground Report.

“The LoC trade mechanism is, therefore, being suspended pending the putting into place of a stricter regulatory regime. This is to ensure that only bonafide trade takes place for the benefit of the people of Jammu and Kashmir, through this mechanism,” it added.

The unilateral decision spread fear among traders who have invested billions of rupees in the barter trade launched pompously in October 2008 as the second Kashmir-specific confidence building measure (CBM) between India and Pakistan after cross-LoC travel.

The ongoing investigation by NIA has revealed that many terrorists and people associated with terror outfits are involved in LoC trade. It has stated in its report that many hostile elements and people associated with proscribed organisations who have crossed over to Pakistan have started trading firms in Pakistan and are operated by terror outfits operating from Pakistan.

The Government of India had stripped off the MFN status to Pakistan after a Jaish-e-Muhammad terrorist killed 40 CRPF personnel in an attack in Pulwama. According to order issued by MHA, LoC trade is liable to be misused on a greater extent in order to evade the consequent higher duties.

The Ministry arrived at the decision of suspending the LoC trade at Salamabad and Chakkan-da-Bagh in J&K. The government is also working towards bringing in a stricter regulatory & enforcement mechanism in consultation with various agencies. The issue of reopening of LoC trade will be revisited thereafter.

However, this facility was being misused by some influential local businessmen in nexus with unscrupulous elements to trade in products from third countries.

Hence, the government has suspended the cross-LoC trade at Salamabad and Chakkan-da-Bagh in Jammu and Kashmir.

The NIA had registered a case on cross-border LoC trade in regards of terror funding in December 2016. The case, where the main complainant was the Home Ministry itself, is still under investigation, after a span of nearly two and half years.

In a statement, the Ministry of Home Affairs said, “During ongoing probe of certain cases by NIA, it has been brought out that significant number of trading concerns engaged in LoC trade are operated by persons closely associated with banned terror organisations involved in fueling terrorism/separatism.”

The ministry also said, “So, it has been decided to suspend LoC trade at Salamabad and Chakkan-da-Bagh in Jammu and Kashmir. Meanwhile, stricter regulatory and enforcement mechanism is being worked out which will be put into place after consultation with various agencies.”

History of LOC Trade

Trade across the Line of Control (LoC) in Jammu & Kashmir began in 2008 during Mufti Mohammad Sayeed’s first tenure as Chief Minister. Hailed as the biggest Confidence Building Measure (CBM) to bring peace in the region, it began three years after the commencement of cross-LoC travel meant to unite the divided families across the LoC.

In 2008, India and Pakistan had taken the step of running trucks on routes that connect the two parts of Kashmir, the Srinagar-Muzaffarabad and Poonch-Rawalakot roads. The opening to trade was seen as the biggest confidence-building measure since the two countries fought their first war over Kashmir in 1947.

The decision to start trade across the LoC was taken in the follow-up of a meeting between the Indian prime minister and the president of Pakistan in April 2005.

Following the meeting, Indian and Pakistani officials further held talks at the Indian capital of New Delhi in May 2006, in which it was decided that cross-LoC trade would be started through a truck service, for which a list of goods would also be identified. Subsequently in a meeting between the Indian government’s Ministry of Home Affairs (MHA) officials and the provincial government officials in Kashmir held on June 16, 2008, it was decided to develop the facilities in two places, at Uri and Poonch, to start the trade. After identifying land and creating other facilities, cross-LoC trade formally started between two countries in October 2008.

Political parties reaction

The National Conference and the Peoples Democratic Party said the Centre’s decision to suspend trade across the Line of Control with Pakistan-occupied Kashmir would only worsen relations with Islamabad.

National Conference leader Omar Abdullah claimed that the Centre was undoing every peace initiative undertaken by the former Atal Bihari Vajpayee government. “The Modi Govt buries another of the Vajpayee era CBMs. Cross LoC trade was a legacy of the Vajpayee Govt decision to facilitate greater people to people contact across the Line of Control in J&K,” Abdullah tweeted.

He added that a less drastic step could have been taken to tackle the illegal activities. “It was to plug this that the state has been pleading for the installation of full-truck scanners at the trade points,” he tweeted. “But rather than install these scanners, the government has taken the regressive and highly unfortunate step of throwing the baby out with the bath water. Instead of saving the CBM, they’ve decided to abandon it.”

Peoples Democratic Party chief Mehbooba Mufti claimed the BJP was using Kashmir as a scapegoat to make electoral gains. “Using Kashmir as a scapegoat to claw its way back to power won’t help BJP,” she tweeted. “It’s an excuse to worsen ties with Pak despite their peace overtures. By doing this, PM Modi has dismantled a CBM initiated by Vajpayeeji. Won’t be surprised if an attack on Pak is in the offing.”

The trade is meant to facilitate exchange of goods of common use between local populations across the Line of Control in Jammu and Kashmir. Trading is allowed through facilitation centres at Salamabad, Uri, Baramulla, Chakkan-da-Bagh and Poonch. The trade takes place four days a week. The trade is based on a barter system and zero duty basis.

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