Citing 'Misuse', India Suspends Cross-LoC Trade

The home ministry said the trade was being "misused" by elements from across the border to smuggle weapons, narcotics and fake currency.

New Delhi: India has indefinitely suspended cross-border trade on the line of control after National Investigation Agency (NIA) claimed that this was being misused by trading firms based in Pakistan with links to militant organisations.

There was an immediate outcry from the two regional parties in Kashmir, who accused the ruling party of using Kashmir as an electoral ploy.

The decision to stop all trade was taken just two days after cross-Loc trade was resumed on Tuesday, after being suspended for two weeks due to heavy border shelling.

The ministry of home affair’s letter dated April 18 said that that the Indian government has “received reports that cross LoC trade routes in Jammu and Kashmir are being misused by Pakistan based elements”. “This misuse involves illegal inflows of weapons, narcotics and currency,” wrote MHA’s department of Jammu and Kashmir director, Sulekha.

The letter stated that the LoC trade mechanism was “being suspended pending the putting into place of a stricter regulatory regime”.

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

The press release issued by the MHA was more detailed in identifying the source of the “input” as the NIA.

It stated that NIA during its investigations of certain cases has found that several of the trading organisations are being operated by “persons closely associated with banned terrorist organizations involved in fuelling terrorism/separatism”.

NIA has apparently asserted that “trade has changed its character to mostly third party trade and products from other regions, including foreign countries, are finding their way through this route”.

The communique added that these trading firms have been opened by some individuals who have crossed over to Pakistan and joined militant organisations. “These trading firms are under the control of militant organizations and are engaged in LoC trade,” asserted MHA.

The home ministry also claimed that the withdrawal of Most Favoured Nation status to Pakistan, following the suicide bomb attack on paramilitary personnel in Pulwama, could also divert more trade traffic to this route.

“Inputs have also been received that in order to evade the consequent higher duty, LoC trade is likely to be misused to a much larger extent,” it said.

In 2017-18, formal bilateral trade, that utilised the MFN provisions, was a mere $2.4 billion (Rs 16,653 crore). However, as per some estimates, India-Pakistan trade through third countries like UAE and Singapore stood at $4.71 billion.

Meanwhile, cross LoC trade over last 10 years through both the trade facilitation centres stood at Rs 8,476 crore ($1.2 billion), according to local chambers of commerce.

Cross-Loc trade begun as part of a series of confidence building measures first initiated by the NDA government under Atal Bihari Vajpayee. The trade between the two Kashmirs officially opened in October 2008.

The trade takes place four days a week at two trade facilitation centres at Salamabad in Baramulla district and Chakkan-da-Bagh in Poonch. It is based on barter system and zero duty.

The suspension take places more than two years after the NIA registered a case about suspicious trade across the Line of Control.

Opposition claims move is politically motivated

Former Jammu and Kashmir chief minister and PDP chief Mehbooba Mufti claimed that the move was yet another move by ruling party to keep Kashmir to reap electoral benefits.

“Using Kashmir as a scapegoat to claw its way back to power won’t help BJP.  It’s an excuse to worsen ties with Pak despite their peace overtures,” she tweeted.

Mufti, who had headed a coalition government with BJP in Kashmir from 2015 to 2018, noted that Prime Minister Narendra Modi had “dismantled” an initiative of Vajpayee. “Won’t be surprised if an attack on Pak is in the offing,” she added.

Pulwama, and by extension Kashmir, has certainly been a constant presence in the political rhetoric of BJP’s top campaigners from Modi to party president Amit Shah as they repeatedly assert in interviews and rallies that only BJP is the ‘nationalist’ party.

Similarly, her political rival, National Conference’s Omar Abdullah also evoked Vajpayee’s name and stated that his legacy was being “sacrificed at the altar of opportunistic populism”.

Abdullah, who had been chief minister from 2009 to 2015 said that the state government had been “pleading” for the installation of full truck scanners at trade points.

“Rather than install the scanners the Govt has taken the regressive & highly unfortunate step of throwing the baby out with the bath water. Instead of saving the CBM they’ve decided to abandon it.

The announcement came on the the day that two constituencies in Kashmir went to polls in the second phase of the parliamentary elections.

Udhampur in Jammu region saw a healthy turnout of 66.76%. But, Srinagar scored a dismal 13% – less than half of the already low turnout in 2014.

Congress member and leader of opposition in Rajya Sabha Ghulam Nabi Azad said, “This is purely an election gimmick. The BJP is feeling that the ground is slipping under its feet and now they are desperately looking at further polarising the Lok Sabha elections.”

Azad, who is campaigning in Kerala, said that during the past few months, there have been no reports of any illegalities at the two trading centres.

“The BJP should know that the public is aware about such moves which are made in the name of their so-called national security.

“The trade had almost come down to bare minimum ever since Modi took over as Prime Minister,” Azad said.