Suspension of Trade across LoC 24/04/2019 – Posted in: Daily News

Suspension of trade across the Line of Control

For: Preliminary; Mains: GS II
Topics Covered: International Relation b/w India and Pakistan, Trade related issues and their pros and cons,  Barter system

 

News Flash

The Ministry of Home Affairs announced the suspension from (April 18) midnight of trade at the two designated points at Salamabad and Chakan-da-Bagh, citing concerns about “illegal weapons, narcotics and fake currency” being transported into India.

  • Line of Control between  Jammu and Kashmir and Pakistan-occupied Kashmir.

 

Other Reasons

  • Zero-tariff barter arrangement is being violated through under-invoicing.
  • The exchange of third party items such as U.S.-origin California almonds.

 

Barter system and zero duty trade

India and Pakistan agreed to initiate trade across LoC in 2008 to facilitate exchange of goods of common use between local populations across the LoC in Jammu & Kashmir. The trade is allowed through two Trade Facilitation Centres located at Salamabad, Uri, District Baramulla and Chakkan-da-Bagh, District Poonch. The trade is restricted to 21 items, which takes place four days a week.

 

Negative Impacts of this move

  • Stopping exchange of goods can put at risk the livelihood of countless people on both sides of the LoC.
  • The trade is mostly of local goods, and those employed, including in the transportation, are from border communities. The cross-LoC trade was among the confidence-building mechanisms that followed the 2003 India-Pakistan ceasefire along the line, and that included a bus service between Srinagar and Muzaffarabad (in PoK).
  • Suspension of LoC trade is to invite suspicion that the step has been taken without careful consideration of the consequences and also for political reasons.

 

Importance of cross-LoC trade

  • It is estimated that since the barter trade commenced along two routes across the LoC in October 2008, employment to the order of more than 1.6 lakh days had been created.
  • The volume of trade over the decade has crossed ₹6,000 crore.
  • The opening of cross-LoC trade was among the confidence-building mechanisms that followed the 2003 India-Pakistan ceasefire along the line, and that included a bus service between Srinagar and Muzaffarabad (in PoK).

 

What should be done instead?

Government should seek a “foolproof mechanism” to enforce the terms of the agreement.

 

Source: The Hindu