Trans LoC trade

The Jammu and Kashmir Government says the trade between the divided Kashmir is domestic and not international. So when lorries carried goods across the Line of Control through the Srinagar-Muzaffarabad road, it began as “barter” as the Government is yet to formulate necessary modalities for this business.
“It is not an international trade. International trade takes place between two sovereign countries but this trade is between one part of J&K with the other,” J-K Commissioner Secretary (Industries) Pawan Kotwal, who is also the nodal officer for the cross-LoC trade, said. “At present, it is some sort of barter. But with the passage of time, it will develop and will be through cash. Once some sort of an arrangement is reached between the banks (of the two countries), it will be through normal channels.” J-K Government’s Economic Advisor and chairman of Jammu and Kashmir Bank Dr Haseeb Drabu said it was not simply a matter of sending goods across the LoC. “If the trade has to be successful, it needs five enabling networks. We will need financial network, a communication network, a transport network, a regulatory network and a legal network,” he said, adding there were no banking relations between India and Pakistan at present.
Government officials agree that there is a lot of backroom work still to be done to formulate a mechanism for this trade. For example, there is no communication link between the Valley and Pakistan-occupied Kashmir as the Government has barred phone calls across the LoC. This is the first major hurdle. Then as there are no Indo-Pak banking relations, normal banking transactions for this trade are impossible.
“We have to work out a way to make these transactions possible. If it was international trade, everything was simple. Once it is domestic trade, the issue of currency comes into play,” a senior official said. “In case the two governments decide that the transactions can happen through foreign banks, this issue can be sorted out.” There is also no clarity as to how the goods will be transported from either side of the LoC. As of now, the J-K Government has set up a trade facilitation centre at Salamabad near Uri while the PoK Government has created a similar facility at Chakoti town, a few miles inside PoK. Vehicles from either side are allowed to carry goods up to these specific trade facilitation centres where the goods are handed over to the respective Chambers of Commerce.
The two governments have not yet evolved a regulatory and legal mechanism for this trade. “It is true that if there is a dispute between the traders, there is no mechanism to resolve it,” an official said. “The reopening of the (Srinagar-Muzaffarabad) road was just a beginning. A lot more work needs to be done before it becomes a viable business relationship

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