The Jammu and Kashmir Government says the trade between the divided Kashmir is domestic and not international. So when lorries carried goods across the Line of Control through the Srinagar-Muzaffarabad road, it began as “barter” as the Government is yet to formulate necessary modalities for this business.

“It is not an international trade. International trade takes place between two sovereign countries but this trade is between one part of J&K with the other,” J-K Commissioner Secretary (Industries) Pawan Kotwal, who is also the nodal officer for the cross-LoC trade, told The Indian Express. “At present, it is some sort of barter. But with the passage of time, it will develop and will be through cash. Once some sort of an arrangement is reached between the banks (of the two countries), it will be through normal channels.”

J-K Government’s Economic Advisor and chairman of Jammu and Kashmir Bank Dr Haseeb Drabu said it was not simply a matter of sending goods across the LoC. “If the trade has to be successful, it needs five enabling networks. We will need financial network, a communication network, a transport network, a regulatory network and a legal network,” he said, adding there were no banking relations between India and Pakistan at present.

Government officials agree that there is a lot of backroom work still to be done to formulate a mechanism for this trade. For example, there is no communication link between the Valley and Pakistan-occupied Kashmir as the Government has barred phone calls across the LoC. This is the first major hurdle. Then as there are no Indo-Pak banking relations, normal banking transactions for this trade are impossible.

... contd.