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India, Pak should solve ambiguities in trans-LoC trade: FICCI, Wagha

The trans-LoC barter should be up-graded to an improved normal trade for long term sustainability, FICCI and Wagha based Amritsar Exporters Chamber of Commerce suggested.

, ET Bureau|
Updated: Jul 11, 2012, 05.15 PM IST
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SRINAGAR: FICCI and Wagha based Amritsar Exporters Chamber of Commerce suggested up-gradation of the trans-LoC barter to an improved normal trade for long term sustainability. They made it clear to the stakeholders here that if the exercise is retained as a CBM it will face more problems in future as ambitions of the traders will grow; given the huge market on either side of the Radcliff divide.

“This trade should supplement the regular trade that is happening through Wagha and Mumbai as any conflict will impact its sustainability,” Pradeep Sehgal who represented a seminar on trans-LoC trade in Srinagar said. “If the barter intends to sustain and survive on policy benefit it will be difficult because subsidies and incentives are temporary but if the stakeholders want an up-gradation on sustainable basis, we can approach the government together.”

Sehgal said the CBM was initiated as exchange of goods between two parts of Kashmir for local consumption. The list mostly comprised handicrafts and commodities simply because they are not being taxed in either of the two markets. It was for the reasons of zero-duty barter that none of the manufactured items was included in the 21-item trading list of which eight have already been banned by the two sides. “In the normal trade there are three taxes on either side of Wagha and in the proposed duty free trade two taxes shall still remain,” Sehgal said. “That is precisely why no government is willing to block its revenue stream and that rule would apply (in future) to trans-LoC trade as well.”

He said the policy makers in Islamabad and Delhi will have to take a call on this and see how long the two markets can sustain the ambiguity and misconception which are at the core of this CBM. “It (trade) is highly fragile and delicate and has problems within,” Sehgal said, “Its scope and framework needs to be decided.”

Rajdeep Singh Uppal of the Amritsar Exporters Chamber of Commerce said a number of exporters in Delhi and Amritsar are “part of the trans-LoC trade” and want it to grow. “But the larger problem is that the CBM with a clear mandate for intra-Kashmir trade is being confused as India Pakistan trade,” Uppal said. “Some people want to avail the same zero duty regime and service the larger markets in Indian and Pakistan which will impact the established trading structure.”

Suggesting the local stakeholders to concentrate on fundamental issues of communication and interaction rather than staking claim over larger markets without consolidating the basics, Uppal said a change is must to get benefited. “You have permission to 21 items and not every item is traded but at the normal trade level between India and Pakistan there is a 6000 item list,” Uppal aid. “It is up to you to make a choice.”

This is for the first time that non-J&K trading bodies which were engaged in backdoor politicking on the issue openly spoke on the subject since India and Pakistan initiated the controlled barter in October 2008 to prevent a further backlash in wake of economic blockade of the rest of J&K by right wingers in Jammu. Though the traders across J&K appreciated the larger trade bodies in making their viewpoint public, they did not get the support they expected.

“Trans LoC trade is not even one percent of the overall volume of trade between India and Pakistan so you need not to worry,” Anil Suri, an industry chieftain from Jammu said. “Our manufacturing costs eight percent more than the Indian plains because of the locational disadvantage we have in J&K so incentivizing the region is not bad.”

Y V Sharma, who heads the Jammu Chamber of Commerce suggested the larger trade bodies not to get upset over the initiative like trans-LoC trade because it is CBM and not business. “It is less business and more emotion because this nominal trade is helping us reunite somehow,” he said. “It is aimed at a larger target to increase the confidence to the level that Kashmir dispute is solved because the idea is to produce the trust and not the wealth.” Sharma said J&K is not interested in international trade and is keen to have a negative list in the trans-LoC trade. He said J&K will sustain it for the larger reasons.

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