Separatists in Kashmir have been using the cross-border trade route and linkages with Pakistan to smuggle weapons and generate money to fuel their anti-India agenda in Jammu and Kashmir, the NIA has said in its charge sheet to prosecute Hurriyat leaders for allegedly stoking terror in the state.
"It has been established that the secessionist and separatist leaders are raising funds through LoC (Line of Control) trade by way of directing Kashmiri traders to do under-invoicing of the goods imported through LoC barter trade," the National Investigation Agency (NIA) said in its charge sheet filed in a court here on January 18.
A portion of the 12,794-page charge sheet is in the possession of IANS that exposes an alleged three way nexus between Pakistan-based militants, unnamed Pakistani officials and separatist leaders to foment terrorism and stone-pelting protests in Jammu and Kashmir.
"...a significant number of traders engaged in cross-LoC trade have relatives across the border who are closely associated with banned terrorist organisations, especially Hizbul Mujahideen," the charge sheet said.
During the course of investigation, the agency said, it found that some traders have been smuggling contraband and weapons in the garb of the cross-border trade.
It said it was conducting a separate investigation into how terror was being financed through the trade link opened in October 2008 as part of a confidence building measure to facilitate hassle-free movement between people living in parts of Jammu and Kashmir divided between India and Pakistan.
However, the NIA said that terrorist leaders exploited the link to further their secessionist agenda and escalate terror activities in the state, particularly in the Kashmir Valley.
It said Kashmiri traders sell goods imported from Pakistan through LoC barter trade to businessmen in Delhi and a part of the profit was being shared with Hurriyat leaders.
The money that goes to the Hurriyat was "used on anti-India propaganda, for mobilising the public to organise protests and stone-pelting and to support families of killed and jailed militants", according to the NIA.
It said hawala operators were also being used to transfer funds for stoking terror in the valley.
"The investigation has revealed the funds are generated by resorting to sale of third-party goods, under-weighing, under-invoicing, large-scale dealings in cash and committing irregularities in maintenance of records.
"This modus-operandi leads to generation of huge cash surpluses on the Indian side which are then channelised through several formal banking channels as well as cash couriers and hawala dealers to the separatists active in Jammu and Kashmir."
The charge sheet has named Pakistan-based terrorist leaders Hafiz Saeed and Syed Salahuddin and seven jailed Kashmiri separatist leaders and three others in the case.
The Hurriyat leaders are Aftab Hilali alias Shahid-ul-Islam, Ayaz Akbar Khandey, Farooq Ahmad Dar alias Bitta Karate, Nayeem Khan, Altaf Ahmad Shah, Raja Mehrajuddin Kalwal and Bashir Ahmad Bhat alias Peer Saifullah.
Shah is the son-in-law of hardline Hurriyat leader Syed Ali Shah Geelani who is a strong votary of Jammu and Kashmir's merger with Pakistan. Hilali is a close aide of moderate Hurriyat leader Mirwaiz Umar Farooq.
The NIA has alleged that the separatists, arrested on July 24 last year, conspired with Saeed and Salahuddin to wage war against India and secede Jammu and Kashmir from India. All of them have been booked under stringent anti-terror laws.
The NIA also charge sheeted businessman Zahoor Ahmad Watali and two alleged stone pelters -- Kamran and Javed Ahmed Bhat.
Watali has been associated with the LoC trade and has worked as the president of the LoC Traders' Association in the past.