The cross border trade between India and Pakistan on the Line of Control (LoC) has been in the centre of controversies over the drug and hawala money trade used for fanning terrorism in Jammu and Kashmir. The trade has always been at the scrutiny of the security agencies for the large fund flow. India suspended cross-border trade with Pakistan-controlled Kashmir last week because it was being used to funnel weapons and drugs. Trade across the “Line of Control” (LoC) that divides the two parts of Kashmir, has served as a confidence-building measure and to help the local population. But tensions between India and Pakistan have been running high ever since a Pakistan-based terrorist group targeted a CRPF convoy at Pulwama claiming over 40 lives. India ordered air strikes on a suspected camp of the Jaish-e-Mohammad group in northwest Pakistan, prompting a retaliatory air raid by Pakistan in middle of parliamentary elections. The inquiries by the National Investigation Agency had shown a significant number of firms engaged in the cross border trade were being operated by people with links to terrorists groups and had amassed wealth in large proportion to fund terrorism in Jammu and Kashmir. Soon after the attack on the paramilitary convoy, India withdrew Most Favoured Nation (MFN) status to Pakistan, accusing the neighbour of not doing enough to rein in the terror groups operating from its soil. Despite all the concessions trade which was to be operated on barter basis and on the traditional products the border exchange found American high value Californian Almonds remain the top of the list in terms of volume and value defying trade protocol. It is believed that the trade in due course of time changed its character to mostly third-party trade and products from other regions, including foreign countries. Unscrupulous and anti-national elements are using the route as a conduit for hawala money, drugs and weapons, under the garb of this trade. Traditionally India-Pak trade has been from Attari in Wagha border of Punjab. Immediately after the Pulwama attack trade came to standstill in this sector also. 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 funneling illegal weapons, narcotics and fake currency”.
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