The Narendra Modi government may have a strict political red line on Kashmir, but on business and development, the government is showing signs of being ready to go the distance. On 26 June, a high-level team of the Ministry of Home Affairs headed by Joint Secretary (in-charge of J&K) RK Srivastava agreed to the long-pending demand of traders in Jammu & Kashmir to be provided telephone connectivity across the Line of Control (LoC). The state had been denied this facility for the past 24 years.
The team also asked the state government to send a detailed proposal for inclusion of more items into the tradable commodities list approved jointly by New Delhi and Islamabad, besides promising to “seriously pursue” replacing the existing barter system with banking facilities.
The proposed measures are likely to be discussed by Commerce and Industry Minister Nirmala Sitharaman with her Pakistani counter-power project.
However, it is the readiness to allow a direct phone link to Pakistan-occupied Kashmir (PoK) at designated points for officers and traders to boost cross-LoC trade that is of far-reaching importance. More so, when it comes with the promise of an expanded list of approved tradable items and banking facility.
Started in October 2008, and evolving further since the re-opening of cross-LoC routes for the movement of people in April 2005, cross-LoC trade has remained stuck in symbolism and politics rather than economics. The move was geared to foster economic interdependence between the two parts of Kashmir and ameliorate the political conflict, but has been struggling to retain its relevance to the evolving discourse over the state. Trade continues to be impeded by barriers such as the barter exchange of goods, lack of communication and banking channels, deficient legal contract enforcement, limit on tradable goods and structural difficulties in free movement.
The contemplated fresh push can change things only if it is complemented by some structural measures to expand the scope and possibilities of the trade. This will ensure that the trade realises its full potential and contributes to the political resolution of the Kashmir dispute.
“We welcome the new measures, but they won’t change anything fundamental about the LoC trade,” says Mubeen Shah, who was the first president of the Jammu and Kashmir Joint Chamber of Commerce and Industries, the first cross-border joint establishment, and is now its member. Shah has a bigger vision for the LoC trade. “We don’t want the trade to be limited to the two parts of Kashmir and the items produced there, even if their number is increased. This will kill its growth,” he says.
Shah wants expansion of economic ties between the two parts of Kashmir to include investment, joint ventures and transit trade through PoK, Pakistan and beyond. He also wants J&K to be turned into a regional trading centre, where cross-LoC transactions include all items traded bilaterally between India and Pakistan with zero duty. He also wants the list of proscribed items to be confined to arms and drugs. “This is possible if undivided J&K is considered as one economic entity by both India and Pakistan,” he adds.
While Shah’s vision may be a tall order, the Modi government’s initiative in the first month of its term offers a ray of hope for what was once billed as the biggest confidence-building measure.
“If communication and banking facility is offered and the items list is expanded for now, we can hope for further improvement in the future,” says Shakeel Qalander, a noted businessman in the Valley. But striking a note of caution, he adds, “We all aspire for peace. But trade alone will not achieve that”.