India and Pak Relation: In Brief : Cross-LoC trade, Intra Kashmir Trade Report

Headline : Explained: LoC trade, in perspective

Details :

Context of the topic:

  • Last week, the government of India suspended the cross-LoC trade, alleging misuse of the facility by individuals linked to terrorist groups


Theme of the topic:

  • The topic gives a brief account of information about the History of the cross-LoC trade and its objective.


Historical background of the Cross-LoC trade

  • The cross-LoC trade between Jammu and Kashmir and Pakistan Occupied Kashmir and also the cross LoC bus service, these two measures were started in 2005 as “Kashmir specific confidence building measures” and to improve India-Pakistan relations.
  • In October 2005, two crossing points, Srinagar-Muzaffarabad at Uri, and Poonch-Rawalakot at Chakan da Bagh, were opened for trade.

  • However, the Mumbai attacks, 2008 put a hold on India-Pakistan relations, but the cross-LoC trade remained unaffected by that.


Issues in trade

  • The agreement was for zero duty trade for a list of 21 items.
  • Traders on both sides struggled through currency and communication issues, which led to the formation of the Intra Jammu & Kashmir Chamber of Commerce & Industry (IJ&KCCI).


Trade Suspension:

  • Last week, the government of India cited malpractice and the involvement of terrorist groups in the trade and thus suspended the LoC trade.


The Intra Kashmir Trade Report:

  • In 2011, a report called Intra Kashmir Trade,was jointly prepared by the Delhi-based IPCS, Conciliation Resources of London, and the Islamabad-based Pakistan Institute of Legislative Development and Transparency.
  • According to the report, cross border trade could be insulated from the India-PAkistan relationship, and has been establishing a “bottom up” approach to peace-building.
  • Trade has also attracted divided families and some former combatants and thus provided them an alternative non-violent option for change and conflict transformation.

Note: The cross Loc trade holds much symbolic value in Jammu & Kashmir more than its value in currency terms.

Section : International Relation