On December 23, dozens of labourers sat around the cargo terminal at the Trade Facilitation Centre at Salamabad in Kashmir’s Uri town, anticipating the arrival of trucks laden with fruits, carpets and sandals, among other goods, from across the border. As 14 colourfully decorated trucks finally trundled in, the idling workers went into action, unloading the goods as security officials kept a close watch.

Away from the stir, a team from the National Investigation Agency scanned through trade documents in a shabby office building. The country’s premier anti-terror agency had on December 21 announced an investigation into the trade of California almonds, suspected to be used to fund militancy in the Valley. A case in this regard was registered on December 16.

Security agencies suspect fraudulent under-valuation of goods, mainly California almonds, imported from Pakistan-occupied Jammu and Kashmir. According to a National Investigation Agency official who is part of the probe team, when a consignment is “undervalued, someone in Pakistan makes a loss while some other person in India makes a windfall profit”. The official, who did not want to be identified, added that “no private trader would suffer a loss willingly, unless they are backed by somebody”.

But for now, the border trade – an important confidence-building measure between the two neighbours – continues as before at the Salamabad terminal. The ongoing investigation has not placed any restrictions on the business, said Hilal Ahmad Turki, president of the Salamabad Cross LoC Traders Union.

The investigation

A police official, who did not want to be identified, said under-invoicing is routine practice here and has been going on for a long time. According to him, traders procure goods, such as almonds and carpets, by bartering items of a lower value. “After selling the [imported] goods, they make more money than they invest,” said the official. “Since it is a barter system, the value of goods traded goes unnoticed.”

Another official added that the trade centre has become a source of funding militancy in the Valley. “We have sent reports [on terror financing] in the past too but successive state governments are choosy about it,” he said. “They want it [the trade] to continue.”

The National Investigation Agency official said, “The question is where the money trail is going.” He added that while the investigation was a “voluminous task” involving the scrutiny of all trade documents since 2008, the team was currently ascertaining the mechanism of trade at the Line of Control and would eventually figure out the technicalities of trade and customs to find the links.

Apart from the Salamabad terminal, the agency is also looking at documents from the Chakan-da-bagh trade facilitation centre in Poonch district of Jammu.

How trade is conducted

Trucks ferrying goods from the Valley unload at Chakote terminal in Pakistan-occupied Jammu and Kashmir while those from across the border come to the Trade Facilitation Centre in Salamabad. Trade union leader Turki said that as per trade protocol, anyone who is a state subject of Jammu and Kashmir can conduct business, “whereas no such limitation is specified about the origin of goods”. There are currently some 367 traders in the Valley.

According to them, the Trade Facilitation Centre lacks a proper barter mechanism. Turki said prices for the same commodity may vary with quality. “But who identifies the quality [of the commodity]?” he asked. “There should have been a monitoring cell to fix prices of trade commodities every week.”

In addition, the lack of a clear mechanism to deal with disputes, in the absence of a banking system, has led to ups and downs. Calling it “blind trade”, Turki said, “Once we send goods from here, we have no surety of return.” According to him, “many traders quit after their payments [exports] did not materialise returns”. While there are 367 traders in business now, the number was reportedly around 600 till a few years.

Turki said business would run a lot smoother if a banking window and a currency-based system were to be set up at the Salamabad terminal. “That way we can pay for what we want to import with surety, without the need to send goods from here,” he added.

He also recommended an expansion of the list of tradable items. “We could set up industries here, procuring raw material from outside the state and export them via the trade centre.”

Economic lifeline

The Trade Facilitation Centre is important to Salamabad as it engages around 94 of its residents as labourers while supporting other businesses such as restaurants, shops and home rentals to traders. Many of these villagers lost their lands to the trade centre as well as to the National Hydro Power Corporation, leaving them with little work.

Mohammad Yunus, 57, used to grow rice but his land was acquired for the trade centre in 2008. He now works as a labourer there. He said that though many labourers still work in the fields and orchards during harvest season, “at least one person from each household works here”. And the trade ensures that the workers have a steady income. “Depending on the number of trucks, out [monthly] income ranges from Rs 3,000 to Rs 8,000,” he added.

There are also those who stay connected to the land of their birth through this trade. Truck driver Abdul Hameed Awan, a resident of Chakote in Pakistan-occupied Jammu and Kashmir, drives by his native village Dachi, from where he migrated in 1947, when he ferries goods to Salamabad. “I see it [my village] across the river but I can’t meet my relatives,” he said. “We aren’t allowed.”

Following the outbreak of violence in the Valley in July, the border trade was halted for more than a month as trucks could not ply. The investigation by the National Investigation Agency comes just as the situation had started getting better, and three months after the attack on an Indian Army base in Uri town in which 20 soldiers were killed, allegedly by militants from across the border.