The Ministry of Home Affairs, GoI has decided to suspend all cross-LoC trade with Pakistan. This is because the routes were allegedly being used as a conduit by elements in Pakistan to push weapons, narcotics and counterfeit currency into India.
The decision has been taken based on a probe by National Investigation Agency (NIA). The probe had suggested that the routes are being misused by banned terrorist organizations.
Further, after the withdrawal of Most Favoured Nation status from Pakistan the duties had increased. There have been concerns that LoC trade was likely to be misused to a much larger extent to evade high duties.
The Line of Control (LoC) is 740km long India-Pakistan border which runs from parts of Jammu to parts of Leh. Cross-LoC trade was started in 2008 by setting up two Trade Facilitation Centres located at Uri’s Salamabad in Baramulla, and Chakkan-da-Bagh in Poonch. The trade took place four days a week. It was based on barter system and zero duty basis.
The India-Pakistan border is divided into three parts: a) International Border (IB), which stretches for approximately 2,400 km from Gujarat to the north banks of Chenab in Akhnoor in Jammu, b) the Line of Control (LoC), and, c) Actual Ground Position Line (AGPL), divides the current position of Indian and Pakistani troops in the Siachen region.