Convener of Kashmir Initiative Group
On October 21, the cross Line of Control (LoC) trade will complete seven years of existence. On face value not much has been achieved in institutionalising this trade, yet in the absence of a proper mechanism (required for such a trade) and continued hostilities between India and Pakistan, trade has moved on. At a time when both countries have largely halted dialogue and, for most of the period after the 2008 Mumbai attacks, shells and bullets have emerged only as means of communication between both sides, the Confidence Building Measures (CBM’s) launched after the 2003 ceasefire promise a hope.
Cross-LoC trade was the second CBM launched after the historic resumption of bus service between the two parts of divided Jammu and Kashmir on April 7, 2005. The bus service between Srinagar-Muzaffarabad and Poonch-Rawlakot heralded a new dawn not only in the battered relations between two bitter neighbours, but also as a relief to tens of thousands of divided families living on either side. Again, just like LoC trade, not much has been done to improve the service. Despite a long and cumbersome procedure to secure a permit to travel on this bus service, nearly 25,000 people have benefitted from this service over the last decade. From a fortnightly service it has been upgraded to weekly, and the permits once issued can now be used thrice in a year.
Like the bus service, the conditions for productive trade have always remained elusive given the ever tense relations between India and Pakistan. But still trade, having a huge symbolic and emotive value, has survived. Not only do the shadows of hostilities continue to hover over it, conspiracies ranging from small tiffs between traders to using this route for smuggling narcotics have emerged as a bigger threat. If trade was suspended on both sides on many occasions due to shelling and firing between armies, it was also put to hold for many weeks in 2014 and 2015 when consignments of narcotics were recovered from trucks coming from Pakistan Administered Kashmir; today, the drivers of the consignment continue to be behind bars in Baramulla jail.
In the absence of a proper mechanism, banking facilities and other regulations, this trade has not stopped. In just five months, from April to August 2015, a trade of INR 288 crores has been recorded from India, while from Pakistan trade stood at INR 196 crores. Total trade turnover since October 2008 has, according to official figures, been put at INR 1735 crores from Indian side and INR 1557 crores from the Pakistani side.
Cross-LoC trade, although agreed upon by India and Pakistan in 2004, only became a reality in 2008 in wake of weeks of long protests and strikes during the Amarnath land row. As the trade bodies in Jammu announced an economic blockade, the traders in Kashmir chose an emotional recourse by demanding the re-opening of traditional trade route via Muzaffarabad. Subsequently a joint call of “Muzaffarabad Chalo” was given and many people, including senior separatist leader Sheikh Aziz, were killed in police firing when a procession was stopped near Sheeri on Srinagar-Muzaffarabad road. New Delhi’s position became precarious and to address the brewing resentment they unilaterally moved to give final shape to the cross LoC trade. It was on September 22, 2008 when erstwhile Indian Prime Minister Manmohan Singh met Pakistan’s former President Asif Ali Zardari on the sidelines of a United Nations general assembly in New York. Both the leaders issued a joint statement saying that the trade routes will be opened on October 21.
This trade began with 21 items comprising primary commodities. It was to be conducted twice a week; only 25 trucks were allowed to cross on each of these days. In July 2011, it was extended to four days per week and to 100 trucks from each side, which was later extended to 200. It is a ‘Zero tariff’ trade, exempted from customs and tax duties. A Joint Working Group on cross-Line of Control CBMs established the modalities of the trade. However, right from the beginning the trade had been suffering from the basic problems- lack of banking facility and financial arrangements, communication and access to markets. In the absence of banking, it has become a barter trade with its inherent problems of delays in money recovery, a volatile market and uneven trade. Trade is largely blind, lacking proper communication mechanisms (on the Indian side the phone facility is restricted) and without access to markets. Traders cannot cross the LoC to explore the neighbour’s market to assess the quality of goods being ordered, and hence are dependent on traders on the other side.
Sadly not much has been done to change this into real trade. Amid blames and counter blames between New Delhi and Islamabad this trade has always remained under threat. While the officials in Delhi blame Pakistan for not agreeing to banking facility, Islamabad in turn has apprehension that this may alter the disputed character of the Kashmir problem. At the same time, strong trade lobbies in India and Pakistan have been working towards the failure of this trade and going to the extent of calling it “illegal and hawala trade” when it is run by two sovereign countries. In order to make it a productive trade Haseeb Drabu, the current Finance Minister of Jammu and Kashmir had given a formula in 2008 itself. The Drabu formula on LoC trade, as it is known, envisages banking relations, including mutual acceptance of letters of credit; a communication network in order to enable traders to know the rates prevailing on the other side; a transport network; a regulatory network to determine the composition of trade; and a legal network for dispute resolution. “The fact is that we have done the glamorous bit, the front end. The back end, which is a critical thing, needs to be put in place. The success or the importance of this trade will be determined by how critically and how meticulously we manage these five mechanisms,” Drabu had said in October 2008 when a delegation of the Chamber of Commerce, Muzaffarabad, visited Srinagar to work out the modalities.
Even as the traders continued, at an unofficial level, to thrash out differences and remove bottlenecks and set up the Joint Chamber of Commerce and Industry (JCCI), governments failed to recognize it. JCCI is a spectacular achievement of bonhomie on both sides as it has members from Jammu, Kashmir, Muzaffarabad, Mirpur and Gilgit-Baltistan chambers. It is currently headed by Y V Sharma, a former president of Jammu Chamber of Commerce and Industry whose voters are spread across the length and breadth of the erstwhile state of Jammu and Kashmir.
Notwithstanding the fact that political resolution of a dispute is necessary to put an end all the suffering the local people have been enduring, the CBMs are about changing context and changing peoples’ understanding of one another. CBMs are about changing relations and behaviour and in this way creating a new context for resolving a conflict. There may certainly be different expectations from CBMs in India and Pakistan; their consolidation ultimately helps civil society engagement which in turn will contribute in creating an environment that would be conducive to an enhanced negotiations process.