India-Pakistan stand-off hit intra-Kashmir trade

This intra-Kashmir trade was started by the government of India in 2008 between two parts of Kashmir divided by the Line of Control as a confidence-building measure. Photo: Ajaz Lolpuri

Bereft of any hustle, the trade facilitation centre at Salamabad Uri in north Kashmir’s Kupwara district wears a deserted look. This centre till 2019 used to facilitate the exchange of goods between traders from both parts of Kashmir – one with Pakistan and the other with the Indian side.

Tea stalls, restaurants, and shops catering to traders are closed, and so are people who used to work as labourers jobless.

“I am jobless for the last three years,” says Hilal Turki who was one of the registered cross Line of Control traders.

This intra-Kashmir trade was started by the government of India in 2008 between two parts of Kashmir divided by the Line of Control as a confidence-building measure. The trade used to take place four days a week and it was based on the barter system.

In 2019 few months before the abrogation of Article 370, the Ministry of Home Affairs ordered the suspension of cross-LoC trade between India and Pakistan via Jammu and Kashmir citing reports of alleged misuse of the trade routes by Pakistan-based elements for illegal inflow of weapons, narcotics and currency.

Turki was the president of Cross LoC traders, once a flourishing trader is now looking for avenues to meet his expense. “For the last three years, I am doing nothing. After finishing my studies I tried my hand to get a government job which is rare in J&K, after that I ventured into the cross LoC trade where I was earning good and at the same, it give me the satisfaction of being self-employed.

Unfortunately in 2019, the trade was suspended which snatched my livelihood along with over 20,000 people who were directly or indirectly associated with this trade.”

Bureau of Research on Industry and Economic Fundamentals (BRIEF) in a study has mentioned that between 2008 and 2019, trade worth Rs 7,500 crore took place via cross LoC trade.“

This period generated over 1,70,000 job days and freight revenue of about Rs 66.4 crore for transporters in Jammu and Kashmir. As many as 1,11,113 truck-full of items were exchanged and Rs 90.2 crore paid to labourers.”

“Government has suspended trade citing alleged its misuse, but we appeal our government to install foolproof mechanism so that any wrongdoing is prevented but at the same time genuine trade should not be made hostage,” Turki said adding that Uri where the felicitation centre is situated used to have the hustle and hundreds of poor residents used to get day jobs via this trade as manual labourers, shopkeepers, mechanics, restaurant owners etc.

“But now all of them are unemployed. Uri is a border region where no industry or tourism can flourish due to its proximity to the Line of Control between India and Pakistan, it was the only avenue for the locals to earn respectable,” he told Maktoob.

According to research ‘Bridging the Divide’ as many as 4229 families were impacted by the suspension of cross-LoC trade.

The research stated that of the total families impacted by trade suspension, around 2,500 families were traders and their staff, 728 trucker and helper families, 420 labourer families, apart from families of people associated with guest houses, gas stations, restaurants, and mechanics in border areas that were all directly involved in the day-to-day trade operations at the two trading points.

Sami-ullah, another Cross LoC trader, said that there is a human aspect to this trade.

“This trade is lost in the din between India and Pakistan hostilities. According to our estimates, the annual loss of Rs 40 crore is incurred by stakeholders who used to be part of this trade. This is the loss Kashmiri traders are bearing. We are not against a measure which is for the betterment of people, but at the same time the human cost of this decision should also be evaluated.”

“Irony is that after banning of this trade, all Pakistani products are available in Kashmir such as suits, dates, minnows, as they are imported via Afghanistan which has added to its price. So the question is was the trade stopped to benefit Afghanistan as traders from that side are exporting their products to Indian markets from that route, whereas we Kashmiri traders suffer,” he added.

Estimates of cross-LoC trade in 2008-19 and interactions with merchants at Uri suggest that about 12,312 trucks would have been used to transit goods via the Uri-Muzaffarabad route for one year after March 8, 2019, had there been no trade ban. With so many trucks crossing over the LoC, potential freight earnings of Rs.9 crore to transporters from trucks transiting to and fro via the Srinagar-Chakoti route were lost.

“Assuming that traders average a profit of Rs 20,000 per truck, potential profit of Rs 25 crore for the 12,312 trucks that would have crossed LoC, could not be realised by the traders in Uri,” the findings of the research said.

As per the research, a wage loss of Rs 1.60 crore for labour and Rs1.45 crore for support staff, including agents, middlemen and representatives, has been estimated at the trade facilitation centre, Salamabad, Uri.

“When the trade was suspended, I had six trucks of fresh bananas ready to be sent across the following day. I had to dump the trucks of bananas because of their short shelf-life. From earning over one lakh rupees, I now earn less than Rs.20,000 a month,” a trader from Poonch is quoted as saying in the research report. 

Why trade was suspended 

In 2009, the governments of India and Pakistan agreed to allow 21 items of goods to be traded via twin routes of Salamabad in Uri in north Kashmir’s Baramulla district and Chakandabagh in Poonch district, where trade would take place four days a week. 

A decade later, In 2019 when Balakot surgical strikes and the hostiles between two arch-rivals heightened, MHA decided to suspend the trade stating that it was used to fund terror activities in Kashmir.

What went against this trade was there was no clear financial transaction as this trade was barter-based, where a Pakistan-based trader would send a truckload of onions and from this side, Kashmir traders would send him an apple truck. There was no financial transaction as the banking system for this trade was not in place. 

“There were several cases registered against the cross LoC traders by National investigating agency for funding terror activities, this dealt a severe blow to this trade which was a flourishing trade and had a huge potential to connect Kashmir to central Asian for trade and commerce,” said a senior government official in Kashmir.