The decision to let goods flow across the border in Jammu and Kashmir from next month, announced in New York by India and Pakistan, has much symbolism attached to it; but it is the promised trade liberalisation across the two Punjabs and between Rajasthan and Sindh that could turn out to be far more consequential for the two nations.

Unlike their plans for carefully regulated intra-Kashmir trade, India and Pakistan have now agreed to open the gates for overland commerce on their international border that has been closed to business for decades.

If they do implement the proposed trade liberalisation, India and Pakistan will be on their way to reconnecting the two Punjabs as well as Sindh, Rajasthan and Gujarat that were once part of a deeply integrated economic space. It should also allow Pakistan’s traders to import goods from India for re-export to Afghanistan and Central Asia.

After their warm embrace in New York, Prime Minister Manmohan Singh and Pakistan’s President Asif Ali Zardari made three major trade-related announcements. One was about commencing “cross-LoC trade on the Srinagar-Muzaffarabad and Poonch-Rawalakot roads on October 21”.

India and Pakistan have been negotiating intra-Kashmir trade for more than three years, and two days before the leaders met in New York, officials from two sides had reached an agreement on all the necessary procedures.

The surprise from New York lay in the other two decisions. Asserting that the expansion of commercial cooperation “provides an effective platform to develop and strengthen bilateral relations”, the two leaders decided to open the Attari-Wagah road link on the Punjab border and the Khokrapar-Munabao rail route between Rajasthan and Sindh to all permissible items of trade.

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