India on Thursday announced suspension of trade across the Line of Control (LoC) in Jammu and Kashmir from Friday, saying it is being misused by Pakistan-based elements to send weapons and illegal currency to fuel militancy and separatism in this country.
The government said the decision, taken more than a month after withdrawing the Most Favoured Nation (MFN) status granted to Pakistan, will be revisited after stricter regulatory mechanisms are put in place to ensure that “only bonafide trade” takes place, benefitting the people of Jammu and Kashmir.
“The government of India has received reports that cross-LoC trade routes in Jammu and Kashmir are being misused by Pakistan-based elements. This misuse involves illegal inflows of weapons, narcotics and currency,” an order issued by the Ministry of Home Affairs (MHA) said.
“The LoC trade mechanism is therefore being suspended pending the putting into place of a stricter regulatory regime. This is to ensure that only bonafide trade takes place, for the benefit of the people of Jammu and Kashmir, through this mechanism,” it added.
The MHA, in a statement here, said that during the ongoing investigations of certain cases by the National Investigation Agency (NIA), “it has been brought out that a significant number of trading concerns engaged in LoC trade are being operated by persons closely associated with banned militant organisations involved in fuelling militancy/separatism”.
“It has, therefore, been decided by the government to suspend the LoC trade at Salamabad and Chakkan-da-Bagh in Jammu and Kashmir with immediate effect.”
The cross-LoC trading mechanism was launched in October 2008 as a major confidence-building measure between India and Pakistan.
The mechanism, meant to facilitate exchange of goods of common use between local populations across the LoC in Jammu and Kashmir on the basis of barter system and zero duty, is allowed four days a week through the two trade facilitation centres – Salamabad in Baramulla district and Chakkan-da-Bagh in Poonch district.
In the statement, the MHA said that the probe conducted by the NIA “revealed that some individuals, who have crossed over to Pakistan and joined militant organisations, have opened trading firms there and these were under the control of militant organisations and were engaged in the LoC trade”.
“Reports have been received that the LoC trade is being misused on very large scale. It has been revealed that the trade has changed its character to mostly third party trade and products from other regions, including foreign countries, are finding their way through this route,” the statement said.
“Unscrupulous and anti-national elements are using the route as a conduit for hawala money, drugs and weapons, under the garb of this trade,” it added.
Noting that India had withdrawn the MFN status to Pakistan after the Pulwama attack, it said the latest action has been taken after inputs that “in order to evade the consequent higher duty, LoC trade is likely to be misused to a much larger extent”.
“A stricter regulatory and enforcement mechanism is being worked out and will be put in place in consultation with various agencies”, it said, adding the issue of reopening of the cross-LoC trade will be revisited thereafter.