India-Pak Border Firing Disrupts Cross-LOC Trade In Kashmir

The ongoing cross border tension between India and Pakistan in Kashmir has disrupted the trade in the valley and their counterparts in Pakistan.

“As far as the cross border trade is concerned, it has totally come to a standstill. In general, the trade got severely affected because of the floods and the traders suffered a substantial loss. We cannot quote a figure because we still do not know the magnitude of the loss,” Rakesh Gupta, president of Jammu Chamber of Commerce told BI India.

He added that the trading communities in both the countries have not exchanged any communication because of the ongoing tension.
“Nothing was practically done even before to address the absence of a proper banking system on both the sides of the LOC. In the present scenario, we cannot expect anything to even move an inch because the armies from both the ends are trading fires at each other,” noted Gupta.

The facilities provided to the traders were also withdrawn because of the cross border firing. Commenting on the issue, Ajay Sahai, director general and CEO of Federation of Indian Export Organisations (FIEO) said that it has been working closely with the government and the industry bodies in Pakistan to enhance the trade relations between the two countries.

“This kind of tension discourages those who are new in the business. But what is worse is the fact that the border tension has postponed the number of talks that were lined up between the governments for better facilitation of trade. The future has been put on the back burner,” noted Sahai.

On being questioned on the measures taken by the apex body of the exporters, Sahai told BI India that the government knows best in the present situation.

Last month, the association had, in fact, facilitated an exhibition for Karachi Chamber of Commerce in Mumbai, which had seen massive participation from Pakistan’s traders. “We are planning a trade fair in Pakistan in February or March next year and are expecting 75 to 100 participants,” Sahai added.

Apart from the border tension, the recent flash flood in the state has also disrupted the cross border trade between the two countries. Gupta averred that due to the flash floods, the payment system in the valley has come to a halt. “Everything was destroyed in the floods. Also, the sales in the main markets in the state are also negligible. People are purchasing bare minimum necessities,” stated Gupta.

According to the statistics by ministry of commerce and industry, the total export to Pakistan in 2013-14 was $2,274.26 million, registering a growth of over 10% over $2,064.79 million. The exports to Pakistan make up less than 1% of the total exports of the country.

On the other hand, the imports from Pakistan were only $426.88 million in FY 14, posting a decline by 21.22% over $541.87 million in FY 13. The import from Pakistan comprised a negligible amount of the total imports of India.

India exports cotton, soya oil meal, vegetables, tomatoes and tea to Pakistan through rail and road routes. A total of 21 items which includes
fruits, vegetables, dry fruits, spices, fabric, carpets and many others are allowed to be traded across the LOC.

The total trade between India and Pakistan has grown by 3.62% from $2,606.66 million in 2012-13 to $2,701.15 million in 2013-14.

Image: Indiatimes.com