Trans-LoC Trade: A Silver Lining
By Bilal Hussain
10 October, 2010
Trade through Uri-Muzaffarabad crosses INR 300 cr mark
In every black cloud there is always a silver lining. The unabated unrest which has affected most of the business segments in the Kashmir valley, however, baring few hiccups couldn’t influence the trans-LoC [Line of Control] trade between two divided Kashmir via Uri-Muzaffarabad route which went ‘smoothly’ during past four months of curfew and protests. Despite, the all odds that trans-LoC trade had witnessed in two years time to a greater extent, if not succeeded but has survived till date.
In the second week of September, 2010 the trans-LoC trade via Uri-Muzaffarabad route achieved another milestone by crossing Indian rupee [INR] 300 crore INR mark. Officials at Trade Facilitation Centre [TFC] Salamabad, Uri, on record have said that the intra-Kashmir trade reached Rs 300.34 between the two divided parts of Kashmir.
During the period, 132 sessions of the trade have been carried out since the initiation of the trade. “Since the start of the trade in October, 2008, goods worth INR 122.45 crore have been exported from Kashmir Valley to AJK [Azad Jammu and Kashmir], while commodities valuing Pakistan Rupee [PKR] 177.89 crore PKR have been imported from the other side,” Trade Facilitation Officer Salamabad said. So far 3569 truckloads laden with 227725 quintals of goods have rolled down from the TFC Salamabad, whereas 261962 quintals of merchandise have been received in 3798 trucks from the Chakoti Trade Centre, AJK.
To mention, the LoC trade between two parts of Kashmir was started on October 21, 2008 with much fanfare, when Governor N N Vohra flagged off the first trade convoy from Salamabad for Chakoti. Since then, the trade has witnessed many hiccups. Disruptions of this nature has affected trade but not to a greater extent.
TRADE DURING UNREST
The intra-Kashmir cross-LoC weekly trade remained suspended on for weeks together in wake of strict curfew enforced in the Valley. With the result, no items were exchanged between two parts of Kashmir via Uri-Muzaffarabad route.
In the month of August, which happened to be month of Ramdhan [holy month for Muslims] as well the demand for dry fruits in Valley has increased manifold with the traders here importing huge quantities from the AJK through the Line of Control. According to the officials at TFC 2867 quintals of dry fruits worth Rs 3.175 crore were imported in 39 truckloads from the Chakoti Trade Centre, AJK , during two-day trade adding last week over 90 per cent of the imported items comprised dry fruits alone, with dry dates forming the major part.
While, the demand for dates had started picking up in Kashmir in view of the Ramadhan, when fresh and dry dates formed over 80 per cent of the import. But as the intra-Kashmir trade remained suspended for three consecutive weeks in the wake of prevailing unrest in Valley, no more supplies could be received exclusively for the Holy month. Disturbances like these imbalances the demand supply base for any trade, in a situation like this the traders and officials involved would have to adopt and devise measure which would have minimal affect on the trade.
A glimpse at the trade figures amply shows how the trade has been going on during these troubled times. The figures for the month of May, when Kashmir was peaceful, were INR 8.15 crore worth of exports and INR 13.45 crore worth of imports. During the month of June, goods worth nearly INR 10 crore were exported while goods worth INR 16.75 crore were imported. In the month of July, the total trade volume was worth nearly INR 19 crore but the value of the trade fell to INR 9.2 crore in the month of August.
TRADE DURING ‘NORMALCY’
The activity that was started with much fanfare has become the victim of symbolism due to lack of proper facilities critical for trade, like no communication links, and non-existence of banks for money exchanges.
The traders on both sides of divided Kashmir currently are being forced to go for barter trader. Business chambers, industrialists, and traders time and again had lamented that the biggest hurdle in the trade is the absence of communication link. The current mode of communication between the traders from both sides is through e-mail only. The traders here are reiterating that they were not taken into confidence at the time of policy making.
It won’t be out of place to mention here a quote of President, KCCI Nazir Ahmad Dar who lamented, “We at KCCI are not at all satisfied with the ongoing trade; the requisite facilities that a trade demands do not exist on both side of Kashmir and the way it is being conducted is not the way we envisaged it.”
While business bodies like Kashmir Chamber of Commerce and Industry [KCCI], had demanded that cross LoC trade should not be restricted only to 21 items; rather all the items produced and manufactured in the state of Jammu and Kashmir should be incorporated in the list. The list in no way corresponds to market realities, they believe.
Currently, trade is conducted only on Tuesdays and Wednesdays between 9 am and 4 pm. Another major hurdle is transportation. Only less 1.5 metric tons (MT) per truckload can cross the LoC due to infrastructural constraints on both sides. Small shipment size makes trade unfeasible as the fuel, handling, cargo, and other costs are not necessarily proportional to the delivery weight.
Trucks have to unload at checkpoints near the LoC, then reloaded onto local trucks and hauled to the destination. Apart from the cost element, this is especially problematic for perishable items.
Moreover, traders have no means to meet and interact with their counterparts. The visa restrictions continue to be extremely stringent for all residents, including businessmen. Many experts here believe that the trade across LoC could not go beyond INR 300 crores provided both governments show seriousness in the trade by easing out process for traders and provide all needed infrastructure for the trade. Earlier there were proposal that the JK Bank, only company from J&K listed on stock exchanges of India, would open a branch in AJK. To mention the JK Bank prior to partition in 1947 had two branches in AJK, one in Mirpur and other in Muzaffarabad.
Till the facilities like banking, telephone, it should be driven purely on demand supply basis rather than sticking to list of items by governments and other important facilities for the trade would not be provided it is bound to remain a symbolic trade.
[Bilal Hussain is a journalist, and writer. In 2009 he attended the McGraw-Hill Personal Finance Reporting Program Courses, supported by The International Center for Journalists. He is associated with the premier English Daily, Kashmir Times. His principal interests are capital markets, developmental sector and ecological economics. He can be reached at firstname.lastname@example.org]