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100 Expected Questions

Prelims Capsule

International Relations

India suspends cross LoC trade with Pakistan

India suspends cross LoC trade with Pakistan


  • GS 2 || International Relations || India & it’s Neighbors || Pakistan

Why in news?

  • The Union home ministry has decided to suspend trade across the Line of Control (LoC) in Jammu and Kashmir at two locations — Salamabad and Chakan-da-Bagh.


  • Illegal trade: The government’s contention was that this trade was being misused by locals on both sides of the border to send illegal weapons, narcotics and fake currency into India.
  • Zero-tariff barter arrangement violated: It also argued that the zero-tariff barter arrangement is being violated through under-invoicing and the exchange of third party items such as U.S.-origin California almonds.
  • Government officials reportedly identified at least 10 militants — essentially residents on the Indian side of the LoC — using such trade openings to cross over to Pakistan Occupied Kashmir and joining terror outfits such as Hizbul Mujahideen.
  • The officials asserted that under the garb of local trade such individuals were assisting militants and separatists within Kashmir.
  • There was also the issue of trade rules being violated in the form of under-invoicing and exchange of third party items such as California almonds.
  • On the face of it then, the government’s decision looks justified. The reality, however, is that it is yet another misstep by the government when it comes to its Kashmir policy.

Local economies

  • The benefits to the local economies from the cross-LoC trade are beyond doubt. Suspending this trade abruptly serves little purpose apart from further antagonising and alienating the locals.
  • The first thing to understand is the nature and origin of this trade. It is essentially in the form of barter trade that allows locals on both sides of the LoC to come together and trade without being straitjacketed by the onerous requirements of international trade.
  • The opening of cross-LoC trade was among the confidence-building mechanisms that followed the 2003 India-Pakistan ceasefire along the line, and that included a bus service between Srinagar and Muzaffarabad (in PoK).
    • The whole point was to allow locals, who often have strong family and cultural ties across the LoC, to mingle and create an atmosphere of trust that was more conducive to allow for a thaw at a higher political level.
    • Many observers believed that given a chance, the social and cultural interconnectedness achieved through such barter trade would eventually lead to a more structured economic and political coming together of the region.
  • It is estimated that since the barter trade commenced along two routes across the LoC in October 2008, employment to the order of more than 1.6 lakh days had been created. The volume of trade over the decade has crossed 6,000 crore.

Way ahead

  • Security concerns must be addressed through greater scrutiny by border patrol officials, more in-depth background checks, better intelligence, etc, and not by stopping exchange of goods and putting at risk the livelihood of the people on both sides of the LoC.
  • What makes this decision even more unfortunate is the timing. The current suspension comes in the course of a shrill election campaign that the ruling BJP is relentlessly pulling towards its hard line on subjects such as Article 370 on the special status of J&K.
  • The government has sent unsettling signals by closing the National Highway between Udhampur and Baramulla to civilian traffic for two days a week to secure the movement of troop convoys.
  • To now summarily suspend LoC trade is to invite suspicion that the step has been taken without careful consideration of the consequences and also for political reasons. The suspension must be urgently revoked.

Mains question

  • Discuss the current state of India-Pakistan relations and comment on the way forward for relations between the two countries.