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21st October 2020 marks the twelfth anniversary of Cross-Line of Control (LoC) trade. The LoC between India and Pakistan was conceived as a part of the Simla Agreement in 1972. It was 36 years later that the governments of India and Pakistan decided to further exploit the potential of existing transport routes by establishing cross-LoC trade. Given the absence of any monetary exchange for goods, vulnerability to frequent trade suspensions and the limited interactions between the traders of two sides, some of the economic success of this barter trade, often referred to as blind trade, can be attributed to the trust between the people on both sides.

On 18 April 2019, Ministry of Home Affairs, Government of India, announced the suspension of cross-LoC trade via its two trade facilitation centres – Salamabad and Chakan-da-Bagh – in Jammu and Kashmir. The sudden and indefinite suspension of Cross LoC trade on 18 April 2019 might eventually weaken the bridges gradually built through the exchange of goods and people to people contact. Trade community, mostly belonging to the border areas of Baramulla and Poonch, have suffered losses because of the suspension of trade. On-the-ground interactions with stakeholders reveal that about 600 merchants and 300 labourers that were all directly involved in the day-to-day trade operations across the LoC were most hit by the trade ban. In addition, there has been an indirect impact on: manufacturers and farmers that provided goods for this trade; end consumers, who now have to pay higher prices for same commodities; and shops, restaurants and mechanics in the border area that depended on this trade and transit.

Read full policy brief “Peace-through-trade at the Line of Control” authored by Afaq Hussain and Nikita Singla here

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The presence of a trade agreement facilitates trade, but the absence of an agreement does not necessarily restrict trade. This is evident as informal routes like the UAE continue to exist to reroute India’s trade with Pakistan, despite the suspension of formal trade. The report ‘Dubai Angled Triangle’ focuses on the changing trends of informal trade between India and Pakistan after 2012, and dives deep into the role of the UAE based on primary research as well as using quantitative analysis. The report is authored by Nikita Singla (Associate Director, BRIEF) and Priya Arora (Senior Research Associate, BRIEF).

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‘Bridging the Divide’ is a micro level analysis of the cross-Line of Control (LoC) trade and the impact its suspension in 2019 has had on the border economy of Jammu & Kashmir. Its an outcome of BRIEF’s program “Building Bridges, (Re)Connecting Communities” in partnership with Conciliation Resources. The report is authored by Afaq Hussain (Director, BRIEF) and Nikita Singla (Associate Director, BRIEF).

DOWNLOAD THE REPORT: CLICK HERE

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