Kashmir's barter trade with Pak affects revenue of Punjab govt

In order to boost Indo-Pak trade through Wagah land route in Punjab, the Confederation of Indian Industry (CII) has recommended a series of measures.

Besides highlighting the key issues, it has recommended that barter trade between Jammu and Kashmir and Pakistan should be stopped as goods from all regions are now being traded tax free in Kashmir, affecting trade in other regions and also amounting to huge revenue loss for both the governments.

Speaking to Business Standard, CII Amritsar Zonal Council Chairman, Suneet Kochhar said, “Initially, this system of trade was started so that the local (residents of Jammu & Kashmir) could benefit but later on traders started importing duty-free goods and sold them in other parts of the country.”

As a result, the imports from Wagah land route was affected, as it attracts import duty. “We have submitted our recommendations that this medieval practice of trade must be stopped, in order to boost trade from the Wagah land route,” said Kochhar.

On being asked about the other recommendations submitted by him, during the recently concluded Indo-Pak Joint Secretary meet, he added, “India has given the MFN (most favoured nation) status to Pakistan, but Pakistan has only a positive list for importable from India.

While appreciating the fact that the country intends to protect particular industries, it is suggested that Pakistan should also come out with the negative list of these new items and thus allow import of the rest of the items from India.

“Besides, there should also be a container movement, as trade through Wagah land route is still limited to truckload of goods in sacks that are bought across the border and unloaded. We need to upgrade to container loads with free passage for convenience, prevention of theft and perishable loss, apart from the possibility of larger volumes,” he added.

Presently the main source of revenue at Wagah land route is import of dry/fresh fruits from Afghanistan (via Pakistan). There is no import of any item of Pakistani origin from the route.

In 2010-11, 94.57 per cent of the total target revenue was achieved, out of which duty on imports was Rs 55.51 crores. The total cargo cleared of import of dry/fresh fruits from Afghanistan ( via Pakistan ) was 67337 mt in 2010-2011.

Kochhar also informed that India and Pakistan together account for roughly 80 per cent of the total GDP of the South Asian association for Regional Cooperation (SAARC) countries.

Also, India is developing Integrated Check Post (ICP) at Attari border (Wagah), Amritsar to facilitate trade between India and Pakistan. The ambitious project is spread across 130 acres and is built with a project cost of Rs 150 crore.

Experts believe that the trade with these two countries will further achieve a new milestone, once the state-of-the-art ICP becomes operational.

After the completion of ICP, the infrastructure will enable ten times the number of trucks to pass conveniently. As per the data, on an average, 30-50 trucks laden with Indian merchandise, cross the Wagah border daily at present.