Government of India suspends LoC trade with Pakistan, says route being misused

In a blow to Pakistan, India on Thursday called off trade between J&K and POK(Pakistan Occupied Kashmir) along the line of control(LoC).

The ministry of home affairs letter, procured by WION and dated April 18, 2019, said the trade is being misused by the Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency and called for a "stricter regulatory regime".

"The LoC mechanism is, therefore, being suspended pending the putting into place a stricter regulatory regime," the letter read. 

This is to ensure that only bonafide trade takes place, for the benefit of the people of Jammu and Kashmir, through this mechanism," the letter added.

Further, MHA sources said "the main objective of allowing trade between J&K and POK, was to encourage local trade and exchange of locally made and grown products." 

Sources added that the 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 trade at Salamabad and Chakkan-da-Bagh in Jammu and Kashmir.

The trade is allowed through two Trade Facilitation Centres located at Salamabad, Uri, District Baramulla and Chakkan-da-Bagh, District Poonch. The trade which takes place four days a week is based on the barter system and zero duty basis.

In an ongoing investigation by the National investigation agency (NIA), MHA said, "persons closely associated with banned terrorist organizations involved in fuelling terrorism/separatism" have been involved in the trade.

MHA said, some individuals, who have crossed over to Pakistan, and joined militant organizations have opened trading firms in Pakistan and these trading firms are engaged in the LoC trade.

Meanwhile, sources also said that a stricter regulatory and enforcement mechanism was being worked out. The issue of reopening of cross-border trade would be revisited thereafter.

The cross LoC trade was started in 2008 as part of Confidence Building Measures by India and Pakistan for trade between Jammu & Kashmir and Pakistan occupied Kashmir (PoK) for 21 agreed items on the barter system, on zero duty basis, through Srinagar-Muzaffarabad and Poonch- Rawalakote routes.

Initially, the trade was allowed for 2 days per week but later, upon an increase in the volume of trade, trading days was increased to 4 days per week.