Trading Nightmares

Recent onion crisis briefly brought LoC trade back into focus when truckloads of onions reached Kashmir markets and eased soaring prices. But ban and counter ban from India and Pakistan on tradable items has left both traders and trade in confusion. Saima Bhat reports.

LoC-Trade-Kashmir

Amid the escalating tension along the Line of Control (LoC), the Government of India (GoI) has shortlisted Pakistan among the countries from where it is going to import onions to help ease shortage of domestic supply.

Interestingly well before India formally requested Pakistan, truckloads of onions started reaching Kashmir through the  LoC.

However, the trade lasted just for a single day as Pakistan stopped sending onions to Kashmir citing steep rise in domestic prices as demand from India soared. Within days the impact of crisis was felt across the border in Pakistan markets as onion prices there jumped from Rs 22 a kilogram to Rs 38  in just three days. This resulted in the ban of supply of onions to India.

Throughout the last one week, onions in Kashmir were sold between Rs 50 and 70 per kilogram. “In order to curb the crisis we contacted our counterparts in Muzaffarabad to send onions for Kashmiri market consumption,” said an LoC trader.

The trade resumed on Tuesday, August 20 after temporary suspension on the eve of Eid and Independence days of  Pakistan and India.  According to officials, 50 truck loads came from Muzaffarabad, while 37 trucks were sent from this side of Kashmir.

The majority of trucks coming from that side carried onions. “Out of the 50 trucks from Muzaffarabad, 45 were carrying onions. The trucks which were sent to Muzaffarabad were carrying bananas in return,” said Raja Ahsan ul Haq, the custodian at the Trade Facilitation Centre (TFC), Salamabad Uri.

According to traders, as the onions from Pakistan reached Kashmir,  there was visible change in wholesale rates of onions. “The wholesale price had gone down to Rs 40 per kilogram,” said Haq.

But then the very next day Pakistan struck off onions from the list of tradable items through LoC. The next day, despite the ban, out of fifty trucks that reached Kashmir from Muzaffarabad 45 trucks carried onions.

However, that could not last long as Pakistan imposed a blanket ban on supply of onions through LoC from Wednesday.  On Thursday only ten trucks came from Muzaffarabad carrying fresh fruits (03 trucks), dry fruits (03), herbals (03) and one truck load of mixed items.

And 37 trucks went from this side of Kashmir carrying Bananas (28 trucks), Cumin (Zeerah) (02), Chilly seeds (02), dry grapes (01), embroidery (01), red chilly (02) and herbals (01).

The ban from Pakistan once again made onion prices to soar in Kashmir forcing people to go for alternatives like local varieties of Leek (Pran) etc. “Since onions became dearer for common man Leek became alternative for chefs and homemakers,” said a local trader.

Leek is usually sold at around Rs 40 per kilogram but given its demand in marriage season this year,  it has already touched Rs 80 per kilogram.

The ban is not new to the traders. “This is not for the first time that a better-performing item has been banned,” Hilal Ahmad Turki, general secretary LoC traders association told Kashmir Life.

According to traders, Pakistani onions this time are of poor quality. “It might be because of the long checking procedure at Trade Facilitation Centre (TFC) including unloading of trucks at all checkpoints that degrades the quality of the crop,” feels Waseem Hassan, a commission agent of vegetables at Parimpora Mandi. “Or may be quality is bad from Pakistan itself,” he adds.

Kashmiri local produce of onions also hits the market in autumn and is available between Rs 26 and Rs 35 per kilogram because of its short shelf life. “Like Pakistani onions, Kashmiri onions too have high water content and short shelf life,”  Hassan informs.

But onions brought from Nasik, Maharashtra are of good quality and can be preserved for a long time. The wholesale price of onion in Nasik is currently Rs 47 per kilogram which according to Hassan is the reason for entire crisis. “They (deals in Nasik) have hoarded the major portion of their stocks adding further to the crisis,” claims Hassan.  “It seems that Kashmiri traders have taken a cue from traders in Nasik and started to hoard the stock. Despite receiving 100 trucks from Pakistan onion prices are still not easing in Kashmir,” he says.

Meanwhile Haq accuses that Kashmiri traders are selling Pakistani onions to different states in India instead of feeding the local markets.

“LoC trade is meant to stabilize markets between two parts of divided Kashmir only. But in order to earn more profit, Kashmiri traders are supplying stocks to other states of India at exuberant prices,” claimed the custodian at TFC Uri.

LoC trade that was started with much fanfare is marred by regular bans and counter bans from both sides. “Whatever starts to earn profit for us gets banned from either this side or that,” said an LoC trader who wished not to be named.

Recently onions were banned, before that it was coconut, cardamom, garlic and moong dal. It was only after Indian home minister’s intervention ban on trading of bananas was lifted.

Local traders feel that there is a lobby behind this ban culture that has become part of the LoC trade.

“Some custom officials who are hand in glove with Amritsar based traders don’t want LoC trade to flourish. They are imposing ban on anything that is making profit to traders,” feels Tariq Ahmad, a member of LoC traders’ association.

While Trans LoC trade is custom free, trade through the Wagah border in Amritsar means heavy taxes on items imported and exported.

Tariq feels that the recent ban on coconut was because of that lobby only. “For the first three years, 90 per cent of the LoC trade was dependent on the coconuts only. The ban on coconut made us lose around Rs 7 crore,” says Tariq.

Another shocker for Trans LoC traders was ban on supply of Moong Dal from Pakistan as it amounted to nearly 60 per cent of the total trade. “I can understand their (Amritsar traders) frustration as LoC trade is tax free while they pay heavy taxes,” says Tariq.

Of the 21 items traded between two Kashmirs, eight items (garlic, ginger, green grams, coconut, ajwain, cardamom, dates, and kidney beans) have already been banned by India and Pakistan citing destabilizing local markets as reason.

Right now even almond is being discussed for a possible ban despite the fact that it grows on both sides of the LoC. The trade thus has reduced to mere three to four items like fresh fruits, vegetables, dry fruits, clothes and carpets.

As per the Standard Operations Procedure (SOP), Trans LoC trade is for only 21 listed items but if any item is not exchanged for three months, then any other item could be added by the authorities.

But Baba Nazir, former custodian of the TFC Uri says that there are many listed items that have never been exchanged in last five years of trade. “Walnut furniture and Kashmiri carpets are quite expensive and same products are available in Pakistan at lesser costs so there is no demand for such products.”

LoC trade is still done using old barter system involving no money transactions. “It is high time to introduce banking facility into LoC trade. Barter system has left entire trade highly prone to corruption,” feels Nazir.

“It’s a blind trade system. Traders are not allowed to go to the other side and there is no communication facility,” said Baba.

Besides these problems, Lone says that the infrastructure is not developed as it should have been.

“At TFC, all products are unloaded from trucks and scanners one by one. After scanning is done, trucks are again reloaded. It is a time consuming process. Loading and unloading affects the quality of the products,” he says. There is a demand of installation of improvised full body truck scanners at these trade facilitation centers.

According to Tariq, it is the current custodian who is actually creating hurdles in the trade. “He (TFC custodian) facilitates his trader friends by allowing their truck to pass on priority basis,” alleges Tariq.

“Out of 45 onion trucks that carried onions into Kashmir, more than 30 trucks belonged to a single trader. Tell me how a normal trader will survive in such circumstances,” he questions. “And those traders are keeping him happy by spending lakhs of rupees.  On an average the present custodian must be earning between Rs 5 and 10 lakh per week,” says Tariq. “This trade is custom free but from time to time this custodian levies custom duty on some traders as per his wishes.”

In the inaugural year (2008) there were around 600 registered traders but within a year their numbers came down to less than 300. Presently there just 30 to 40 traders left.

“Rest of them defaulted. These defaulters gave us in writing that they couldn’t survive in the trade because of the corruption,” claims Tariq.

The trade between the two parts of Kashmir was revived after six decades in October, 2008 as one of the most significant Confidence Building Measures (CBM) taken by the Governments of India and Pakistan.  This years in October the trans LoC will complete five years but still the trade happens for four days only, Tuesday, Wednesday, Thursday and Friday but traders want it should be extended for six days a week.

To boost the LoC trade, consolation resources group of Delhi and Jinah Institution of Pakistan was organizing a trade conference in Islamabad Pakistan on August 26 in which 43 trade union representatives from J&K were invited to attend the conference. The conference has been postponed. As per reports, the precipitants were going to press both India and Pakistan for the enhancement in the list of items and they were going to stress for the beginning of telecommunication and banking facilities. Another agenda was to extend the trade for six days.

In October 2012, Home Minister of India SK Shinde had assured the traders that all of their issues including land line telephone facilities for registered cross border traders, short visa in favour of traders, lifting of ban on coconut export, no article of third country be allowed for trade, articles of both parts of the state be given priority in trade and other difficulties would be looked into. But a year  has passed and nothing has really changed on ground.

To expand the trade and address the demands of traders, the state government had also requested the government of India to include 98 more items in the export list and five in the import list which include metal and alloy products, pharmaceutical formulations and drugs, pesticides, chemical products like paints and varnishes, plastic products, readymade garments and dress materials, edible products, electric and electrical items and other miscellaneous products.

As per the figures revealed in last assembly session, goods worth Rs 1,039.32 crore have been traded along the two LoC crossing points in the state in about four years up to February 2013.

Pertinently, despite the visits of Union Home Secretary RK Singh in May, 2012 followed by the visit of Union Home Minister Sushil Kumar Shinde in October, the ‘biggest’ CBM between India and Pakistan Intra-Kashmir trade via Uri-Muzaffarabad has failed to pick up as per the expectations of the traders.

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