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Ataullah Handoo, 75, suffered losses when the cross-border trade was suspended in April 2019. Photo: Adil Abass

In Kashmir border town, villagers long for resumption of India-Pakistan trade

  • In 2008, the town of Uri began thriving when trade routes were opened along the Line of Control as part of measures to ease tensions between India and Pakistan
  • But since New Delhi halted all trading activity two years ago, security lockdowns, telecoms blackouts and Covid-19 have plunged residents back into poverty
Until two years ago, Aamir Ataullah said his future as a merchant in the Indian town of Uri, close to the border with Pakistan, seemed bright.
The 28-year-old was among hundreds of barter traders plying their goods along the Line of Control that divides Kashmir between the nuclear-armed neighbours, which opened cross-border trade in 2008 as part of measures to ease tensions.

The move was an economic godsend for Uri’s 150,000 residents, especially traders, labourers and drivers. Small hotels, restaurants and the market area began thriving in the once-sleepy town.

Then India abruptly halted all trading activity in April 2019, cutting off the livelihoods of Aamir and many others who had come to rely on cross-border trade.

A highway leading to Pakistan along the Line of Control near Uri town, India’s Jammu and Kashmir. Photo: Adil Abass

“I had a lot of dreams then,” said Aamir, a law graduate from Kashmir University. “We’d thought the trade would improve further, more items would be allowed to be traded and the process would be further simplified.”

The government cited “illegal weapons, narcotics and fake currency” as reasons for the clampdown.

Ataullah Handoo, Aamir’s 75-year-old father, estimated that more than 150 labourers from Uri town and its adjoining villages, who were engaged in loading and unloading goods-laden trucks, lost their jobs after the trade was suspended. About 340 traders also suffered losses.

“Because of this cross-border trade, hundreds of poor people here got jobs as labourers, drivers and there was a hustle and bustle in the town. All the trade went through this town,” said Handoo, who was also a barter trader.

“But when it stopped all of a sudden, everything collapsed and a lot of people lost their source of income. The money of some traders was stuck across the border. We had no other avenue to retrieve it since it was a barter trade.”

A few months later, New Delhi unilaterally revoked the limited autonomy of Indian-held Kashmir, and further divided and downgraded the region into two centrally governed union territories.

“After the trade was suspended in April 2019, whatever hopes of resumption we had were killed on August 5 when everything shut down for months and all our means of communications were snapped,” Aamir said, referring to the telecommunications lockdown imposed by New Delhi.

Hilal Ahmad Khan Turki, president of the Salamabad Cross-LoC Trade Union in Uri town. Photo: Adil Abass

Poor regulation

Uri is a hilly region spread over 48 villages, with some mountainous areas inaccessible by vehicles.

Being a border town, it has a heavy presence of soldiers and police officers. Residents need a permit to travel to villages far from the main town and closer to the Line of Control.

Most people worked as farmers and labourers, often travelling to Kashmir’s largest city, Srinagar, for employment, until the cross-border trade opened up other economic opportunities.

On an average trading day, 35 trucks carrying products such as medicinal herbs, honey and famed Kashmiri papier-mâché products would cross over to the Pakistani side via the Chakan-Da-Bagh-Rawalakot route in Jammu or the Salamabad-Chokoti route in the Kashmir region. Business took place on both sides of the border four days a week.

The Salamabad Trade Centre in Uri would receive trucks from Pakistan carrying items such as Peshawari leather sandals, dried fruits, onions, and black mushrooms, which sold well in the Indian markets.

The value of cross-border trade from October 2008 to March 2019 reached about 57.2 billion rupees (US$770 million), according to local government figures.

Shafeeq Ahmad Shah, 33, was among the labourers who helped to load and unload goods from the trade centre.

“I earned 800 to 1,000 rupees per day four days a week. I could take care of my family and kids with that,” said the father of five, who now struggles to find work.

“I still work as a labourer, but there are no regular work days and the wages are low,” Shafeeq said. “Some days you find work, some days you don’t.”

The entrance of the Trade Facilitation Centre Salamabad near the Line of Control in Uri, Jammu and Kashmir, India. Photo: Adil Abass

Hilal Ahmad Khan Turki, the president of the Salamabad Cross-LOC Trade Union, blamed loopholes in the trading process that made the barter traders vulnerable to the charges levelled by the Indian government.

“When the trade was first started in 2008, it was like a wonder,” he said. “It was meant to create confidence between two countries. It was a good move and at the time it felt that it would improve relations between two countries.”

Former barter trader Handoo said the route that came through Uri “was a natural trading route between Muzaffarabad on the Pakistan side and this side before the 1947 partition”.

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But the trade programme was not without its flaws. Over the past few years, Turki had submitted several suggestions to the local government in Kashmir to improve trade conditions, including enhancing the list of items to be traded, installing full-body truck scanners at the trading centre in Uri, introducing a one-day visiting visa for traders to sort out any differences with their counterparts, providing banking facilities, and creating a dispute resolution pathway.

“I had also suggested that the Indian law enforcement agencies should monitor and check our accounts quarterly so that there are no doubts over our trade,” said Turki, whose suggestions fell on deaf ears.


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Ongoing tensions

While India and Pakistan announced a border ceasefire in February this year, distrust between the neighbours remains high, making the prospect of a trade revival in the near future slim.

Islamabad on July 23 called on the United Nations to investigate whether India had used Israeli-made Pegasus spyware to spy on public figures including Prime Minister Imran Khan.

The Pakistani leader’s phone number was on a list of what an investigation by a group of 17 international media organisations and Amnesty International said were potential surveillance targets for countries that bought the spyware.

Pakistan’s foreign office issued a statement accusing India of “state-sponsored, continuing and widespread surveillance and spying operations in clear breach of global norms of responsible state behaviour”.

New Delhi did not respond to the allegations.

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Still, some Kashmiri business representatives have been lobbying for trade to resume, especially after a ceasefire was announced in February, and Pakistan in March allowed the import of cotton and sugar from across the border.

Sheikh Ashiq, the president of the Kashmir Chamber of Commerce and Industries, which represents more than 1,500 businesses, traders, and exporters, said: “We have been constantly raising this issue with the government whenever we interact with them, and have been told it will be done at an appropriate time.”

Salamabad Cross-LOC Trade Union president Turki said the re-establishment of cross-border trade was the best way to generate employment in Kashmir.

On top of the cancelled border trade and back-to-back lockdowns imposed by India after August 2019, the Covid-19 situation had sent residents back into poverty, he said. “This trade had created a revolution. Over 10 years, it had provided over 172,000 job days to labourers and drivers at 800 rupees per day, which is better than some government employment generation schemes.”

The Trade Facilitation Centre Salamabad in Uri town, Jammu and Kashmir, India, is deserted. Photo: Adil Abass

Turki’s assertions are backed up by a 2016 study by the New Delhi-based Bureau of Research on Industry and Economic Fundamentals.

The report, titled “Trading Confidence: A Compelling Case for Cross Line of Control Trade”, concluded that the trade had played a key role in transforming a conflict-ridden region into an area with significant economic activity.

“The trade has provided employment to former militants and youth of Jammu and Kashmir,” it said. “Many erstwhile hostile districts like Uri and Muzaffarabad now witness a surge in different associated economic activities coupled with enthusiasm about cross-LOC products in the market. The trade has generated more stakeholders than some of the social security schemes applied in the state.”

Meanwhile, as Uri’s trade centre sits quiet, resembling an abandoned bus yard with the iron supporting the roof rusting away and sheets of aluminium poking out in several places, residents can only wait in hope for trucks to rumble into the town once more.

Additional reporting by Reuters