LoC Trade Misuse


28 April 2019

On 19 April 2019, the government shut down the free border trade in Kashmir. When the Cross-LoC trade was opened in 2008, it was hailed as a major confidence building measure. The trade since then was allowed through two transit points called ‘trade facilitation centres’ in the state of Jammu & Kashmir: one at Salambad, Uri in Baramulla district and the other at Chakkan-da-Bagh in Poonch district. Trading was allowed four days a week and is on barter system with no customs duty being charged.

The idea behind the cross-LoC trade was a confidence building measure aimed at helping Kashmiri on both sides of the de facto border to trade goods and travel between the two parts without hindrance. The focus was on local populations and local goods.

However, the Pakistan military and its terrorist associates are always quick to exploit any loophole for their benefit. Thus, a good and beneficial agreement was quickly subverted by Pakistan’s military intelligence unit, the Inter Services Intelligence, to service Kashmir terrorists’ needs for funds, arms and fake currency.

Unfortunately, the LoC trade misuse meant that the trade far from helping local Kashmiris has changed character and other parties have come into the picture. The trade today is no longer restricted to local produce but includes goods from all over Pakistan and from abroad including stuff like Californian Almonds.

The Government of India claims it has been receiving information that Pakistan based elements, militant groups included, were using the cross-border route to send arms, hawala money, drugs and fake Indian currency to the Indian side to fuel the unrest there. The Kaman transit point in Salambad is 18km inside Indian territory which meant that hundreds of Pakistani trucks along with their drivers, helpers and loaders cross over into the Indian side every week. Among these individuals are Pakistani agents, terrorists and their sympathisers. It is impossible to check the antecedents or the activities of all these individuals.

It is believed that the trucjers and ISI agents began smuggling in contraband, Pakistani SIM cards, narcotics and even explosives through this trade route. Trade has been suspended on occasion when weapons have been found hidden in trucks coming from Pakistani side.

It appears that investigations by the National Investigation Agency had shown a significant number of firms engaged in the cross-border trade were being operated by people with links to terrorist organisations active in the Kashmir Valley. A number of Kashmiri terrorists after crossing over to the Pakistan side of Kashmir had opened trading firms in Pakistan to exploit the cross-LoC trade. Many of them were using this route to continue to aid the armed struggle in the Kashmir Valley.

According to newspaper reports, shell companies floated by Kashmiri militants of the Hizbul Mujahideen tanzeem are engaged in border trading. One firm named in the reports ia Al Naseer Trading Company run by Basharat Ahmad formerly of Budgam district now settled in Rawalpindi. Kashmiri businessman Zahoor Ahmed Watali who has been charged with money laundering and terrorist funding, was president of LoC Traders’ Association and allegedly funnelled money through this trade to terrorists and separatists.

The cross-LoC trade has also assumed greater importance for Pakistani traders following the Pulwama terrorist attack that left 40 CRPF personnel dead. Soon after the attack, the Indian government withdrew Most Favoured Nation (MFN) status to Pakistan. The cross-LoC route to funnel in regular Pakistani exports to escape high customs duty has become more prevalent, it is learnt.

This is not the first time the border trade has been suspended. Trade was suspended in 2015 when it was found that Pakistani truck drivers were smuggling drugs across the LoC.

The cross-LoC trade will remain suspended until the Government of India finds ways to prevent its misuse.

Separatists were the first to howl in protest. Mirwaiz Umar Farooq declared the suspension in Cross-LoC trade will come at a huge price for the people. He actually meant it would deal a big blow to those trading in death and destruction. The common man in Kashmir is hardly affected by the trade which is controlled by a handful of Kashmiri oligarchs. Therefore, the need to make it look like an outrage against Kashmiris in general as another example of New Delhi’s high-handedness when in fact it is an attempt to reverse a decision that would cost a lot for the Valley’s Separatists, terrorists and the powerful interests that support them.

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