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In the digital age, barter system only option for trade across PoK

india Updated: Jun 20, 2016 11:53 IST
Abhishek Saha
Abhishek Saha
Hindustan Times
Barter trade

Trucks carrying goods from across the border pass through the Srinagar-Muzaffarabad road to the Salamabad Trade Facilitation Centre near Uri.(Waseem Andrabi/HT Photo)

That the trucks are from Pakistan is evident from the elaborate decoration and calligraphy on their frames. Loaded with potatoes, apples and dry fruits, they have crossed the Line of Control — the de-facto border between India and Pakistan — and are headed towards the quiet border town of Salamabad.

Simultaneously, an equally large convoy of trucks — carrying bananas and spices — sets off from Salamabad and snakes its way towards Pakistan occupied Kashmir. This goods exchange takes place four days a week (Tuesday to Friday) through two routes – from Chakan-da-Bagh in Jammu and Salamabad in Kashmir.

A trader “exports” an item worth a certain amount across the LoC and his counterpart there sends back goods worth an equal amount. The goods that are exchanged have to be from the list of 21 items mutually accepted by both sides.

Started in 2008, this barter trade was meant as a key Confidence Building Measure (CBM) between India and Pakistan. The focus was back on it last Monday when chief minister Mehbooba Mufti told the assembly that the Centre had agreed to set up “banking and communication” facilities for the cross-LoC trade. She was also pushing for opening a few more trade routes, Mehbooba told the house.

According to the ministry of industries and commerce, goods worth over Rs 2,800 crore — Rs 1,496.96 crore worth exports and Rs 1,307.62 crore worth imports — were traded through the LoC between April 2013 and March 2016.

What sets the cross-LoC trade apart is that no currency changes hand and most of the business deal is done between relatives on either side of the border

“It works entirely on a barter system based on trust,” says Hilal Turkie, president of the Salamabad cross-LoC traders union. He adds that many traders do business with a cousin or an uncle who probably crossed the LoC when militancy erupted in the 1990s.

Shailendra Kumar, commissioner secretary of the industry and commerce department of the state, told HT, “The barter system is not a confirmed trading practice. Unless it is monetised, it is neither transparent nor profit-making.”

Every week, 140 trucks are sent across LoC from the Trade Facilitation Centre (TFC) at Salamabad and the 347 traders registered at this TFC get their turn based on an alphabetic roster.

The existing TFCs do not have an officially sanctioned means of communication. Traders talk to each other via internet-based caller apps like WhatsApp and Viber. But it is no match for face-to-face negotiations, which the traders have been demanding.

“One major worry for any trader is the insecurity. Once he has sent his items across, he remains worried until he gets the goods he ordered in return. Moreover, there is no check on the quality of the items shipped, nor is there a mechanism to ascertain its exact value,” says Peer GN Suhail, a Srinagar-based policy analyst.

Most traders agree that a formal banking system will mean “more freedom”.

Bilal Ahmad Butt, a trader from Baramulla, says, “If there is a banking facility, then I will have the freedom to do better business and have bargaining power. In the present system, we are tied to the one or two people we trust to do our business with.”

Another section of traders also want an increase in the number of items and the number of trading days.


ITEMS EXPORTED Carpets, rugs, wall hangings, shawls and stoles, embroidered rugs, embroidered items (including crewel), furniture (including walnut furniture), wooden handicrafts, fresh fruits and vegetables, dry fruits, saffron, aromatic plants, fruit-bearing plants, dhania, moong, imli and black mushrooms, Kashmiri spices, rajmah, honey, paper mache products, mattresses, cushions, pillows and quilts, and medicinal herbs

ITEMS IMPORTED: Rice, jahnamaz and tusbies, precious stones, gabbas, namdas, Peshawari leather chappals, medicinal herbs, maize and maize products, fresh fruits and vegetables, dry fruits, honey, moong, imli, black mushroom, furniture (including walnut furniture), wooden handicrafts, carpets and rugs, wall hangings, embroidered items, mattresses, cushions, pillows, shawls and stoles