Faced with threats from cross-border terror financing, India will once again pitch to transform the barter system of trade along the Line of Control (LoC) with Pakistan into a financial mechanism. The Joint Working Group on cross-LoC trade is expected to meet in Islamabad on July 19. Cross-LoC trade between the divided parts of Kashmir was initiated as a confidence-building measure between the two countries in 2008. However, the trade, growing in both volume and value, has generated multiple concerns for Indian security agencies over the possibility of the channel being used for terror funding by terror outfits based in Pakistan. The Centre-appointed JK interlocutors have also backed the government’s efforts to monetise the barter trade system and increase the number of trading days. The Indian delegation which will visit Islamabad to participate in the JWG meet will consist of officials of the ministries of home, external affairs and commerce. The move to establish a banking facility for cross-LoC trade is expected to help security agencies crack down on the hawala network for terror funding from Pakistan, government officials said. However, while India has completed the process of identification of a bank on its side, there has been sufficient delay on the Pakistani side. “We hope there is some forward movement,” an official said.
The Indian side is also expected to take up with Pakistan the need to strengthen roads and bridges on the PoK side of LoC to enable transport of goods in trucks of higher tonnage in the Cross LoC trade.
The JWG will also discuss the proposal to increase the number of trading days from two to four days a week.