May 24th, 2012
01:46 PM GMT
India and Pakistan’s border in Kashmir is one of the most dangerous in the world. But the "Line of Control" dividing them has been opened to trade, in the hope that it can boost the local economy and help build peace between the two nations.
Kashmir has been a major flashpoint for India and Pakistan since the countries were partitioned at the end of British rule in 1947. Both say Kashmir belongs to them.
There's still a heavy security presence throughout the area, but the situation is much better than it was a few years ago, say local residents. And the relative calm is bolstering trade.
Four days a week, trucks loaded with fruits, spices and other goods cross one of the most militarized frontiers in the world - the Line of Control - a de facto border that divides Kashmir.
Pakistani trucks cross the frontier carrying fruits and vegetables for the local Indian market. After a short drive in Indian-controlled territory, the Pakistani trucks offload their goods to Indian ones. But not a single rupee is exchanged. Instead, they use a unique barter system, a truck-load of potatoes traded for a truck-load of bananas, for example.
The barter system was introduced by the governments of India and Pakistan in 2008. It marked the first direct trade link between the two sides of Kashmir in more than 60 years. Officials called it a confidence-building measure, and the results are promising. As tensions have eased, commerce has grown, with cross-border trade now valued at around $120 million a year.
But traders want to see more done to facilitate commerce. “We don't have banking here, we don't have telecommunication here,” Indian trader Mohamad Shafi Bhat told CNN’s Mallika Kapur. “We cannot see each other, we cannot visit each other.”
He said that doing business across the line of control with someone he has never met requires a lot of trust, adding that cross-border trade can help build trust between India and Pakistan.
Mubin Shah, of the Jammu and Kashmir Joint Chamber of Commerce and Industry, believes that with more trust and more trade reforms, Jammu and Kashmir could become a major trading hub for Central Asia.
“Jammu and Kashmir can take advantage of its geographical position, for the first time,” said Shah.
He added: “All the previous years, it has been disadvantaged, because we are on one side China, another side India, another side Pakistan, then there is Afghanistan. But, if trade is done, and Jammu and Kashmir is declared as a free economic zone, it will completely change the politics of the state, politics of the country, both the countries, India and Pakistan.”
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