Context

Recently, The Home Ministry issued orders to suspend trade across the Line of Control (LoC) in Jammu and Kashmir.

About

This trade was meant to facilitate exchange of consumer goods through two trade facilitation centres at Salamabad, Uri, Baramulla and Chakkan-da-Bagh in Poonch, which became the hotbed of militant activity to enhance terror funding activities.

• Causes behind this suspension :
  • This trade has changed its character to mostly third-party trade and products from other regions, including foreign countries, are finding their way through this route.
  • Unscrupulous and anti-national elements are using the route as a conduit for hawala money, drugs and weapons.
  • One of the main sources of illegal income was the carpets and dry fruits trade route.
  • A significant portion of these funds are also used to sustain home grown terrorists. This money is used to finance their food, provisions, upkeep and other expenses that they incur.
• Impact :
  • The decision will immediately impact around 300 traders, and more than 1,200 people who are directly and indirectly associated with the trade on this side.
• Significance :
  • This step aims to stop Pakistan based groups from using cross LoC routes to move hawala money.
  • The step deals a heavy blow to small cross-border trade between India and Pakistan.
  • The aim was to crack down on all sources of terror funding, as well as stopping the misuse of cross-LoC trade routes by Pakistan based groups “for funnelling illegal weapons, narcotics and fake currency”.