Ever since cross – LoC trade between two parts of the divided State of Jammu and Kashmir was initiated way back in 2008, the results have been encouraging by and large. No doubt a couple of disappointing incidents did happen while transactions were negotiated, yet fortunately these did not turn too formidable to force suspension of bilateral trade. It has to be remembered that cross-LoC trade opened at two points namely Salamabad and Chakan-da-Bagh, were essentially considered as catalyst to confidence building measure between the two parts of the divided State. If the prospect of traders from two sides meeting and exchanging goods and ideas succeeded, it would, in due course of things, have salutary impact on bilateral relations.
As traders showed interest in conducting transactions, in due course of time they felt that the effort could grow into a strong connectivity only if trade across the LoC was regulated along international rules and practices. As the prospect of bilateral trade through these points was highly encouraging, the two sides began to move slowly towards upgrading the system so as to be in consonance with international norms. A number of improvements were suggested. Actually, delegates of traders from both sides met and discussed their problems and drew common list of demands. They asked for telephone connectivity, banking system to replace barter system, body scanner for the trucks to reduce checking time, transit sheds with facilities, adding more items for trade to the existing list, reduction of taxes on some of the goods and many more facilities. The traders sent memorandum to their respective Governments supplicating for early resolution of their problems. As we know, the paper work takes a long time and the request of the traders took so many years to fructify.
In a recent meeting, the State Cabinet took up the subject of cross- LoC trade and approved some measures that will certainly go a long way in boosting trade across the LoC as is desired by both sides. The Cabinet endorsed the proposed institutional mechanism to provide banking facilities to traders for conducting their business across the LoC. The banking mechanism will help the trade to grow much faster and enable import and export of listed commodities at a larger scale and faster pace. It will address the regulatory aspects related to the trade between India and Pakistan. The commercial banks in Jammu & Kashmir and Pakistan occupied Kashmir would provide a facility to their respective exporters to realize their dues by opening a Trade Facilitation Account at their end. The initial debit and final credit by the exporter’s bank would be through the facilitation account. Although the settlement would be done in US Dollar with the cross rates between the two currencies arrived via dollar yet the goods will be invoiced in exporter’s domestic currency. Hence, there is no exchange risk for the exporters. Any exchange risk will be borne by the importer.
These are all welcome steps to help in making steady progress in confidence building mechanism between the people of divided land. We would appreciate that more trading facilities are provided and interaction among larger number of people is promoted.
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