LoC trade in J&K halted to check smuggling of arms, drugs and fake currency

India has suspended cross-border trade with Pakistan-controlled Kashmir after it was found that Pakistan was misusing the trade routes to funnel weapons and drugs, the government said on Thursday.

In a further crackdown in the volatile territory, the ministry of home affairs issued orders to suspend the LoC trade in Jammu & Kashmir with effect from 19 April. 
The government said the action has been taken after receiving reports that the cross LoC trade routes are being misused by the Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency.
It may be recalled that the LoC trade is meant to facilitate exchange of goods of common use between local populations across the LoC in Jammu & Kashmir. The trade is allowed through two Trade Facilitation Centres (TFCs) located at Salamabad, Uri in Baramulla district and Chakkan-da-Bagh in Poonch district. The trade takes place four days a week and is based on barter system and zero duty basis.
However, reports have been received that the LoC trade is being misused on very large scale. It has been revealed that the trade has changed its character to mostly third party trade and products from other regions, including foreign countries, are finding their way through this route. Unscrupulous and anti national elements are using the route as a conduit for hawala money, drugs and weapons, under the garb of this trade.
During the ongoing investigations of certain cases by NIA, it has been brought out that a significant number of trading concerns engaged in LoC trade are being operated by persons closely associated with banned terrorist organizations involved in fuelling terrorism/separatism. Investigations have further revealed that some individuals, who have crossed over to Pakistan, and joined militant organisations have opened trading firms in Pakistan. These trading firms are under the control of militant organizations and are engaged in LoC trade.
After the Pulwama incident, Government of India has withdrawn the MFN status to Pakistan. Inputs have also been received that in order to evade the consequent higher duty, LoC trade is likely to be misused to a much larger extent.
The government has, therefore, decided to suspend LoC trade at Salamabad and Chakkan-da-Bagh in Jammu and Kashmir with immediate effect. Simultaneously, the authorities are working on a stricter regulatory and enforcement mechanism to enforce the decision in consultation with various agencies. The issue of reopening of LoC trade will be revisited thereafter.