For many, opening up of the Line of Control (LoC) in October last year for trade between India and Pakistan was a dream come true. For traders in Punjab, however, it is turning out to be a nightmare. The cross-LoC trade through Salamabad and Chakan Da Bagh in Jammu and Kashmir, Punjab traders feel, is eating into the trade through the Wagah route in Punjab.

Trade through Wagah started in 2005 and grew impressively over the years. But that was till trucks started plying on cross-LoC trade routes. As trade picked up in Jammu and Kashmir, traders say, Punjab suffered.

Latest data from Custom authorities shows that trade through this route has largely become unilateral, that is, while India exports heavily, the imports are negligible. And the few commodities that come from across the border are not from Pakistan but from Afghanistan. During the last half of the fiscal ended March 31, 2009, according to Customs data, India imported only 19 commodities (mainly dry fruits like almonds, raisins, figs, apricots, pista, pine nuts from Afghanistan and some consignments of fruits such as pomegranates and melons) through the Wagah route.

“The imports from Pakistan come primarily through the Atari train route. The trade through Wagah is limited,” said D S Sra, Chief Customs Commissioner for the region.

The reason for the decline, Punjab traders say, is the cross-LoC trade. They allege that the terms of cross-LoC trade—exchange of only 21 items of Kashmiri origin, including carpets, rugs, wall hangings, strictly on barter system— are being violated thus hurting the trade through Wagah. Indian traders, they say, are exporting non-Kashmiri origin goods like Cardamom, Moong Dal and Copra and importing Chinese garlic and oranges. Besides, the Pakistani traders, who are required to pay a four percent import duty if they import goods through Wagah or Atari, are turning to cross-LoC routes as trade through these routes is duty free.

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