Freeze of trade with Pakistan hits thousands in India

NEW DELHI: At least 9,354 families, roughly 50,000 people, in Punjab and about 900 families in Indian Occupied Kashmir have been directly impacted by the shutdown of trade between India and Pakistan across the Wagah-Attari border and the Line of Control (LoC) Salamabad-Chakhan da Bagh routes in 2019, says a report.

India’s cancellation of MFN (most favoured nation) status to Pakistan and the trade routes’ closure following the February 14 last Pulwama attack, as well as Pakistan’s counter-measures, including an airspace ban and suspension of trade relations, have resulted in losses in billions of dollars and hundreds of job days. All these have brought thousands “down to their knees”, according to testimonials from the affected groups comprising traders, custom house agents, truck drivers and helpers, those working at tyre and mechanic stores, local dhabas and motels, foreign media reported.

“Better to have killed us in one go than to have finished off our livelihood. After the MFN decision was taken, there were homes where the stove couldn’t be lit for four days,” said 72-year-old Kulwinder Singh Sandhu, Attari Truckers Union chief. He was in tears during the launch on January 16 of the report called “Unilateral Decisions, Bilateral Losses” as he recounted the impact of the events of 2019 on families engaged in the business near the Wagah-Attari border.

Officials said the decisions on trade were meant to be a tough message for Pakistan and would impact Pakistan’s economy even more than India’s. Former Ambassador to the United States Arun Kumar Singh said, “Even though ties have been much worse in the past like after the Parliament attack, trade had never been touched."

According to the report, authored by researchers at the Bureau of Research on Industry and Economic Fundamentals (BRIEF), the measures that led to a 200% duty increase on imports from Pakistan at Punjab saw even the relatively meagre bilateral trade of $2.56 billion in 2018-2019 dropping to $547.22 million (April-August 2019) - imports dropping from about $500 million to just $11.45 million. Exports to Pakistan “mainly” go through the sea route (about 80%), while imports, including rock salt, dry dates, cement and gypsum, come largely through the land route in Punjab.

As a result, members of the Attari Truckers Union, who had invested an estimated 350 crore (PKR7.6 billion) in the business, have lost all hope of recovering their losses.

Similarly, the closure of LoC trading points in Jammu and Kashmir has put small trade, handicrafts sellers, truckers, labourers, and hotel owners near the LoC in Baramulla and Poonch out of business, said trader Mohammad Iqbal Lone. The losses don’t account for the much larger impact of restrictions on trade and tourism imposed after the August 5 decision on Article 370, which the Kashmir Chamber of Commerce and Industry had estimated at approximately Rs10,000 crore ($1.4 billion) by October 2019.

“We have all just come to zero,” Lone told the audience of academics, economists, journalists, former diplomats and officials at the launch in Delhi of the report, authored by Afaq Hussain and Nikita Singla.

Cross-LoC trade before the suspension order in April 2019 was about $95 million for the year. In the suspension order, the Ministry of Home Affairs (MHA) said trade would be resumed after “putting into place a stricter regulatory regime” in order to block misuse of the route for “weapons, narcotics and currency,” but nine months later, there are no signs of resumption of LoC trade.

“When you put names and faces to these numbers, the picture is clearer,” said Pradeep Sehgal, a trader from Amritsar, who has been engaged in India-Pakistan trade for decades. “Think of the porter who has had to take his children out of school or the weigh-bridge worker whose wedding was called off because his lost his job, and you will realise the real cost,” he added.

Traders from Amritsar said another decision taken by the Centre last year, which had affected local traders, was the move to cancel oil imports from Iran due to U.S. sanctions. According to them, Iran had cut its reciprocal imports of Basmati rice, which has led to a 30% drop in its prices. This had added to the other losses over trade with Pakistan, said Punjab Rice Millers and Exporters Association Director Ashok Sethi.

The traders and truckers said they hoped the governments at the Centre and in Punjab and Jammu Kashmir would consider compensating them for the losses and finding alternative trading markets internally so that those affected were not put out of business permanently. “Trade can be switched off with one stroke of a pen, but it cannot be switched on again easily if the government wants to in the future as trust takes time,” said Sehgal.