India snaps cross-border trade ties with Pakistan

India on Thursday suspended trade across the line of control in Jammu & Kashmir, citing misuse of the trade route by Pakistan-based elements to funnel illegal weapons, fake currency, and narcotics.

The ministry of home affairs (MHA) announced that it has "issued orders to suspend the LoC trade in Jammu & Kashmir from Friday."

Explaining its rationale behind the action, the MHA said, "This action has been taken as the government has been receiving reports that the Cross LoC trade routes are being misused by Pakistan-based elements for funneling illegal weapons, narcotics, and fake currency." Trade is allowed through two Trade Facilitation Centres (TFCs) at Salamabad in Uri, part of the Baramulla district and at Chakkan-da-Bagh in the Poonch district. Trade usually takes place on four days of a week and is based on the barter system, wherein zero duty is applicable.

One MHA source said, "This facility was misused by some influential local businessmen in nexus with unscrupulous elements to trade products from third-party countries. Therefore, the government has suspended the LoC trade."

The Centre is also working on a stricter regulatory enforcement mechanism and the "issue of reopening of LoC trade will be revisited."

In an ongoing investigation by NIA, the MHA said, "persons closely associated with banned terrorist organizations involved in fuelling terrorism and separatism" have been involved in the trade. MHA added that some individuals, who have crossed over to Pakistan and joined militant organisations have opened trading firms in Pakistan and are now engaged in LoC trade.

BASED ON BARTER

Trade is allowed through two Trade Facilitation Centres at Salamabad in Uri, part of the Baramulla district and Chakkan-da-Bagh in the Poonch district. The trade usually takes place on four days of a week and is based on the barter system.