Neeraj Rohmetra
JAMMU, Aug 5: Though the trade and travel across the Line of Control (LoC) has emerged as one of the biggest Confidence Building Measures (CBM) between the two countries, there is little likelihood of the barter system being replaced by banking system in near future.
The issue had also been recently discussed by Chief Minister Omar Abdullah with External Affairs Minister SM Krishna, when the latter had arrived in Kashmir for formally launching two Passport Seva Kendras (PSKs) in Srinagar and Jammu at a function on July 26 this year
The Chief Minister had emphatically raised the demand of replacing the existing system with the proposed ‘Banking model’ at the earliest to increase the momentum of trade, which had crossed Rs 1800 crore figure.
“However, the External Affairs Minister had informed the Chief Minister of the difficulties in shifting to banking model in the near future. The Union Minister had also made Omar aware of the threadbare discussion that had taken place during the recent visit of the officials of the External Affairs Minister with their Pakistani counterparts on July 19 this year”, official sources said.
The issue had been thoroughly discussed in the meting of the India-Pakistan Working Group on cross-LoC CBMs, which was held in Islamabad on July 19. The meeting which was part of the bilateral dialogue process that had resumed last year after a gap of over two years in the wake of 2008 Mumbai terror attacks had discussed the ways to strengthen trade and travel arrangements across the Line of Control in the Kashmir region and modalities of introducing new cross-LoC CBMs.
“Officials, who accompanied the External Affairs Minister during their visit to Kashmir Valley had dropped several indications that Pakistani side during the round of talks in Islambad, which was headed by Director General (South Asia) in the Foreign Ministry of Pakistan had expressed great reservations over shifting to the proposed banking model”, sources said.
They said, “during the talks, while the India side had proposed opening of bank branches to boost commerce across the LoC, the Pakistani side contended that shifting to the banking system would imply that trade was taking place between two countries and not within the same State”.
“The Pakistani counterparts stated that the trade between two countries would mean that the trade was taking place between borders of two countries and this decision would have major political implications in their country”, sources added.
Finance Minister, Abdul Rahim Rather when contacted told EXCELSIOR that the banking model had been proposed by the Department of Financial Services, Government of India, for facilitating banking service for LoC trade to replace existing barter system. “Recently, the Chief Minister had also taken up the issue with the External Affairs Minister during his visit to Valley in view of the difficulties being faced by the LoC trade in the existing barter system”, he said adding that the matter had also been taken up with the Government of Pakistan.
“First the two countries should agree to the proposed banking system and then the role of the Governing body like Reserve Bank of India shall come into picture. The proposed banking model should actually be a pure commercial transaction between the banks on the two side of the LoC without any involvement of Central Banks”, he said. The State Government had also provided some telephone lines to the traders to facilitate early decision taking process.
Dr Mubeen Shah, President of J&K Joint Chamber of Commerce of Industied (JKJCCI) – an association of trading stakeholders in the trans-LoC trade, when contacted said, “if there is no limit, sky is the limit for the trade. Barter trade was started because of opposition of people of not converting LoC into international border. Lot of people from both sides feel that it is done in US dollars, LoC will get converted into international border. It is because of these misgivings that both the Governments have agreed to the barter system”.
“We had also suggested that the trade can be done in Indian and Pakistani currency and this would have become a possibility if banks from both sides had opened their branches across the LoC. Although some members of the business community are also happy with the barter system, the trade would have flourished more, if system of banking is agreed to”, he said.
“One important achievement of our meeting with traders from the other side and other stake holders is that there is unanimity over the fact that the State is one economic entity comprising both the areas across the LoC and a solution has to be found keeping this in fine”, he added.
While the State Government has provided some telephone lines in few places including the office of Industries Department, this isn’t a practical solution. Interestingly, the trader from the other side of LoC were using satellite phone to talk to our people, we were not able to respond to them on timely basis. “The traders here have to make phone calls to their colleagues to London and they further convey the message to their counterparts across the LoC, which is not the right way actually”, he asserted.
The trade on both Salamabad-Chakoti and Chaka-da-Bagh-Rawalkote routes is presently being done on barter system, but there are lots of problems associated with this system. The trade has been exempted from VAT and the number of trade days have been increased from 2 to 4 a week to give boost to it. At times, currency fluctuations also caused losses to traders involved in this trade.
Trending Now
E-Paper
Follow our WhatsApp channel