Context: Trade across LoC has been suspended.

Why?

Misuse of trade: misused to push drugs, weapons and counterfeit currency into the Valley from across the border, as well as for trade in goods excluded from the list meant for cross-LoC trade.

Hawala: Hawala, despite a severe crackdown, continues to exist as a channel through which Indians continue to send and receive money from abroad. In the case of Kashmir, the absence of banking channels must have exacerbated the situation.

Suspension of LoC trade is a poorly-thought move that shrinks the space for manoeuvre in Kashmir and with Pakistan. Why trade across LoC is important?

• Confidence building In Kashmir– Kashmir needs special specific confidence-building measures, and these need to be kept separate from the India-Pakistan relationship.
• Symbolic Value– Cross LoC interaction carried huge symbolic value in Kashmir, even though the trade itself has been far below its actual potential, and wastied up with red tape and the absence of banking facilities and telephone connections.
• High Monetary Value– its annual value grew from Rs 1 crore in 2008-09 to over Rs 3,000 crore at the present time.

What can be done?

Monitoring of trade routes- monitor the crossing points at Uri and Chakkan da Bagh through which it was taking place four times a week.

Why trade should not be cancelled altogether?

• Signals loss of control –Calling off an entire trade route because it is being misused by some sends out the message that the government has lost control, as with the highway closure.
• Push to alienation –Plus, drawing increasingly tighter red lines in Kashmir, India only makes it more difficult for itself to get out of the corners it has painted itself into when the time for dialogue comes, as it will eventually.