'The Kashmir file' Traders seek rekindling business with Pakistan

Traders in India-administered Kashmir are demanding authorities reopen trade routes with Pakistan as the prices of goods and food continue to skyrocket. In 2008, India and Pakistan opened trade across the “Line of Control (LoC),” a heavily militarised de-facto border dividing Kashmir between India and Pakistan. The move was seen as a “confidence-building” measure between New Delhi and Islamabad.

However, New Delhi stopped cross-border trade in April 2019 as it prepared to scrap India-administered Kashmir’s semi-autonomous status. India claimed the route was being misused by people with links to terrorist groups. During the Islamic holy month of Ramadan, more people are eating fruits and buying other commodities in Muslim-majority regions of India-administered Kashmir. The closure has led to high prices for common goods.

Hilal Turkey, chairman of the LoC traders’ association in Kashmir, told DW that the prices of commodities have increased by 200% after the suspension.

“Buying fruits like grapes, oranges, dates, Miswakhs (teeth-cleaning twigs), or spices that were traded through the LoC is now beyond many people’s budget,” he said. When cross-border trade in Kashmir was active, 21 items were allowed to be traded, including varieties of fruits, vegetables, and handicrafts. The trade was carried out duty-free using a barter system and did not involve exchanges of currency.

Trucks would cross the border at the Chakan-da-Bagh station near the town of Poonch, and at a crossing near the town of Uri to the north. The trade route created a frontier economy and provided livelihoods to thousands of people living in remote areas that usually see meagre economic activity.

Uri and Chakan-da-Bagh turned into business hubs and thousands of traders from across northern India would converge there to buy commodities at cheaper prices. New shops, warehouses, and restaurants sprang up, engaging local youth as managers, drivers, and daily wage workers. The route also allowed the remote region cheaper access to food staples and commodities that otherwise would enter Kashmir from mainland India at a higher price. Even cotton items and suits brought from Pakistan-administered Kashmir would be sold at cheaper rates on the Indian side of the border.

Traditional Pakistani footwear and suits became a big hit. Many boutiques sprang up across Kashmir, selling Pakistani suits. Within ten years, annual trade via the LoC route was estimated to be at the $1.2 billion mark. However, as the trade continued to grow, it also drew controversy as traders in mainland India paying taxes on their goods complained that the cheap, tax-free goods entering India via Kashmir were distorting competition.

Additionally, authorities became concerned after reports of narcotics, weapons, and counterfeit currency on trucks coming from Pakistan raised suspicions that the trade was being used to promote anti-India militancy. In April 2019, New Delhi suspended the trade indefinitely.

Official data shows more than 4,000 families were directly involved in the day-to-day trade operations across the LoC. Manufacturers, farmers, and truckers that provided and moved goods also benefited.

After the route was closed, many traders either stopped the business or are under heavy debt. The cross-LoC trade was an important contributor to economic and social development in the conflict-torn Himalayan region. Said Afaq Hussain, an economist who has done extensive research on the LoC trade route, “The ban has resulted in the loss of goodwill and cooperation that had gradually built because of trade. Trade was critical to promoting peace and regional cooperation in the region, and it should resume immediately.”

This article was provided by Deutsche Welle