Trading in Kashmir

AFTER the ceasefire in Kashmir on Jan 1, 1949, a simple rahdari permit system was devised for travel to Azad Kashmir but it was discarded a few years later. The bus proposal was first mooted by India on July 9, 2001 before the Agra summit and revived on Oct 2, 2003.An accord with Pakistan was reached only on Feb 16, 2005 and a fortnightly bus service began on April 7. A hideous mouse emerged from the mountain of labour.Travel across the LoC “will be by an entry permit system, once identities are verified. Application forms for travel will be available with designated authorities in Srinagar and Muzaffarabad.” Travel from each side will be on the basis of a permit which it will issue while travel on the other side will be on the basis of an entry permit which will be given by that side. Application forms will be available at the regional passport office in Srinagar, not with officials in the rural areas as in the rahdari system. They will be sent to the other side for its permission, which it will notify to the authority that sent them.There will thus be two permits. No bus will cross the LoC. The bus from each side will stop at the LoC in a ‘synchronised’ movement. Passengers would get off, cross the LoC on foot carrying their luggage, and board the waiting bus on the other side, after securing an entry permit there. This was claimed to be a “humanitarian procedure”. It was sheer symbolism. Two more points were opened for travel Uri-Muzaffarabad and Poonch-Rawalakot.An all parties conference, convened by India’s Prime Minister Dr Manmohan Singh, set up working groups. One of them was on ‘Strengthening relations across the Line of Control’. Headed by a former foreign secretary, Mr M.K. Rasgotra, it submitted an able report on Jan 9, 2007. It recommended simplification of procedures for travel; enlarging the category of persons eligible for permits; “measures to increase goods traffic”; a joint consultative machinery of officials and representatives of trade and chambers of commerce to resolve difficulties; exemption from customs duty for a period of three years; widening of roads, and, eventually, “the creation of a Free Trade Area” in the entire state of Jammu and Kashmir in both its parts.It also recommended exchanges between the universities in the state; visits of school students; “grant of admission in certain specific courses on a regular basis” to students from Azad Kashmir, cultural exchanges; visits of groups of journalists, lawyers and academics, telephone links — “both landline and mobile should be allowed across the LoC”, subject to “security”.Militants talk freely on satellite phones providing useful tips to security agencies. It is the people who suffer. Particularly useful are the group’s comments on the travel permits. It takes “several months” to acquire them. All residents of the state are required to obtain Permanent Resident Certificates that are issued after extensive verifications. Why not use them and also grant traders multiple entry/exit permits for a year? The report was not implemented. A laborious procedure and a fortnightly bus service cannot possibly meet the people’s needs.Last October trade representatives from Azad Kashmir visited Srinagar. The upshot was an accord on a joint body known as the Federation of Jammu & Kashmir Chamber of Industries and Commerce. The president of the Kashmir Chamber of Commerce and Industries, Dr Mubeen Shah, signed the MoU with his counterpart from Azad Kashmir, Mr Zulfiqar Abbasi.Another MoU set out details on trade. The federation would provide “special cards” for its members to facilitate travel. The trade organisations recommended to their respective governments use of dual currency of both countries as mode of payment with the euro as the reference point. The premier banks in each part of the state could open branches in the other part, postal and courier services and telephonic links could be opened; there would be joint ventures in the private sector in some fields and exchange of experts in IT, engineering and other fields.On Oct 21, 2008 trade across the LoC began as trucks loaded with commodities rolled by amidst festivities on both sides. As with the bus in 2005, now with the trucks of 2008 the details were neglected. Symbolism alone mattered. Less than a month after the fanfare the trade ran into a host of problems. On Nov 11, traders decided to suspend supplies in protest. The governments had rushed to open the LoC trade after the blockade of the Srinagar road by some in Jammu.The sticky issues remained currency and phone links. This was trade by barter. Remittances by banks were not allowed. “What kind of blind trade is this that the seller and buyer cannot speak to each other? How can we go on like this?” Mr Abbasi rightly asked.The chief minister of Kashmir, Mr Omar Abdullah, assured a delegation of traders and industrialists on Jan 15 that he would take up the matter with the centre. “I will ask New Delhi whether it is serious about cross-LoC trade. Otherwise it is a pointless exercise.” A fortnight later Mr Mubeen Shah said that the trade was on the brink of collapse as traders were losing contact with their counterparts in Azad Kashmir. The president of the Federation of Chamber of Industries Kashmir, Mr Shakeel Qalandar, pointed out that while the Mumbai blasts did not affect Indo-Pak trade, they stalled moves to resolve problems in cross-LoC trade.This is most unfortunate. When the trade began the problems were anticipated and accurately pinpointed by Dr Haseeb A. Drabu, economic adviser, J&K government and chief executive of J&K Bank at a meeting in Srinagar of representatives of the government with those of the federation of Chambers of Commerce of Azad Kashmir. “For the cross-LoC trade to become a viable, self-sustaining economic process will require establishing five basic networks between the two parts of J&K.”These are in finance (banking/facilities for accepting letters of credit etc), communication, transport, a “regulatory body” to determine composition of trade and other matters, and a dispute-settlement mechanism. “All these five networks need to be put in place before the cross-LoC trade actually takes off … The fact is that we have done the glamorous bit; i.e. the front end. The back end, which is a critical thing, needs to be put in place.” Mention of dual currency raises hackles; but Indian currency is freely accepted in some large shops in Karachi as is Pakistani currency in some parts of New Delhi.
By A.G. Noorani The writer is a lawyer and an author.