To what extent can trade build peace in Kashmir between India and Pakistan?
Blois Maéna
Abstract
In more than 70 years of conflict, Kashmir has been the theater of Indo-Pakistani conflictual relations but also peace institutions. Among Confidence Building Measures (CBM) implemented between India and Pakistan, trade at the Line of Control (LoC) has been seen as an option where a dialogue could be established through commercial cooperation and implementing a legal framework favorable to peaceful relations between parties. Trade as a peacebuilding measure has been one of the pillars of Indo-Pakistani relations to rely on thanks to their bases and respective benefits it implied until 2019 when trade and diplomatic relations finally ended due to challenges and limits of trade within the Kashmir conflict. Due to its ambiguities and diverse origins, a sustainable peace in Kashmir can not be built by trade only, unless other peacebuilding measures are implemented to deal with remaining historical tensions that have impacted New Delhi and Pakistan, and especially the Kashmiris for many decades. Within a conflict, trade can thus be considered a peacebuilding instrument as long as it adapts to the conflict modalities and establishes a framework where its infrastructures, its actors, and its conditions are implemented all together through clear objectives towards a more peaceful future.
INTRODUCTION
Since the partition of India in 1947, India and Pakistan have been facing tensions that gathered in one place in particular, Kashmir. Located at the crossroad between India, Pakistan, and China, the historical princely state of Kashmir had been the theater of religious and territorial tensions that met at the border of the two countries called the Line of Control (LoC). Officially established during the Simla Agreement that followed the first Indo-Pakistani war in 1971, the LoC separates Azad Kashmir and Gilgit-Baltistan (under Pakistan control) and the Union Territories of Jammu and Kashmir and Ladakh (under Indian control). Although a common agreement was reached, the LoC remains one of the most militarized borders in the world with an ambiguous status that is thus not recognized as an international boundary. Regarding the critical situation, there have been several peace interventions from international institutions such as the United Nations, and some countries like the United States to cite only one. These actors did not manage to establish sustainable peace in Kashmir until the 2003 ceasefire along the LoC when the border had been seen as a potential place where dialogue could be established between India and Pakistan. In fact, in the following years, both countries found a common ground where dialogue could take place: trade. In the first place, travel across the LoC started although it remained controlled and limited. Then, commercial relations were established as well through Confidence Building Measures (CBM). Hopes for peaceful Indo-Pakistani relations rapidly dissipated after the 2019 events that led to the end of trade and diplomatic relations between New Delhi and Islamabad. Even though there have not been any breakthroughs within Indo-Pakistani relations in Kashmir since 2019, we can still note that trade played a major role in establishing peacebuilding measures, even if it was oriented towards economic benefits as well. Trade relations imply parties to develop a dialogue and cooperation to trade successfully.
This is the reason why raising this issue is important since it could be implemented in the framework of other conflicts in the world where trade could be seen as a potential peacebuilding measure. However, in the case of Kashmir, trade has shown several challenges and limits that led to the end of Indo-Pakistani relations. Therefore, this paper aims to ask to what extent trade can build peace within Kashmir between India and Pakistan. To answer this question, we will first analyze the historical background from 2003 to 2008 to better understand Indo-Pakistani relations and how trade at the LoC started being implemented as a peacebuilding measure and its impacts. From this first section, we will draw a picture of the challenges and limits trade faced as a peacebuilding measure following the 2019 events that led to the end of trade. In the third section, we will finally discuss the results.
METHODOLOGY
The following research is based on diverse sources in order to have several perspectives on trade and the conflict itself. First, reports from international organizations that include surveys and interviews in the field helped to have a more realistic approach to the conflict. On another hand, governmental documents and articles relating to officials’ statements and decisions gave an indicative idea of the different decisions. Finally, the literature used for thisresearch gives a more general approach and distance on the situation.
IMPLEMENTATION OF TRADE AS A PEACEBUILDING MEASURE
The 2003 ceasefire between India and Pakistan was implemented along the LoC to
prevent violations of border crossings and try to build trust between both countries since India was accusing Pakistan of contributing to terrorist expansion’. The implementation of this ceasefire enabled diplomatic Indo-Pakistani relations to be restored and created a dynamictowards more peacetul relations, which materialized a few years later through the first CBMs between India and Pakistan. In fact, in 2004, India’s Prime Minister Vajpayee and Pakistan President Musharraf met in Islamabad to discuss and to commit working jointly to fight terrorism and soften the LoC through travel and trade®. The first CBMs were focused on the launch of a bus service that runs from Srinagar (India) to Muzaffarabad (Pakistan) on April 7th 2005. One month later, the Poonch (India) – Rawalakot (Pakistan) was also launched. This travel bus service permitted Kashmiris to have their first people-to-people interactions they had been deprived of for many decades.
Between 2005 and 2008, New Delhi and Islamabad managed to maintain peaceful
relations. As mentioned in the first CBMs, trade was also part of the initial plan. Thus, while discussing strengthening previously established CBMs, LoC as a trade meeting point was discussed as well. From May 2008, Indian and Pakistani officials and the Joint Working Group (JWP) on cross-LoC CBMs respectively met several times to agree on trade modalities across the border such as traded goods, visas and permits to cross the border, trade schedule on certain days, etc. The cross-LoC trade was finally launched on October 21st, 2008 between India and Pakistan through the joint statement by President of Pakistan Zardari and Indian Prime Minister Singh that officially established the cross-LoC trade via multiple routes: the Uri- Salamabad and Poonch-Rawalakot routes. These trade measures remain one of the largest peacebuilding implemented measures between New Delhi and Islamabad, as emphasized Mahwish Hafeez in its study’. It laid the foundations of dialogue and cooperation through a common project while allowing Kashmiris to finally cross the border.
Sometimes referred as the Line of Commerce or Cooperation, the LoC did look like a
“game changer” within Indo-Pakistani relations in Kashmir, as Ayesha Saeed qualified it*. As it was emphasized by experts, trade has been considered a sign of hope for the future of Indo- Pakistani relations. As explained by Diana Klein in a Conciliation Resource report on peace at borders, due to the dialogue and communication needed to establish trade between parties, trade can be a way to promote peace within a region, followed by all the benefits and appeasement that resulted from previous talks where modalities were respectively chosen by
each party®. In fact, this trade agreement is based on modalities that aimed to benefit the Kashmiri population as well.
On one hand, if we look closer at trade modalities, they were implemented on purpose so that local populations across the border benefit from this exchange economically. For instance, interviews of traders were made about the list of 21 primary items that have been approved and are supposed to stimulate local economies such as furniture (carpets, rugs, etc) and food (rice, fresh fruits and vegetables, dry fruits including walnuts, etc)®. By softening the LoC and decreasing tariffs, they created a propitious framework that stimulates and encourages both countries to trade together. Consequently, the development of trade in this region de facto increased the employment rate, including workers directly involved at the LoC, but also laborers and farmers’. This virtuous circle was possible thanks to the creation of a legal framework through institutions that could establish a base for trade to be clear for all parties. Thus, the Jammu and Kashmir Joint Chamber of Commerce was responsible for LoC trade matters and provided a physical infrastructure for trade in Kashmir.
It is important to note that on October 26, 2008, terrorist attacks occurred in Mumbai involving a Pakistani terrorist group. This event could have had devastating consequences on trade at the LoC, and could have led to a revival of tensions, if not worse. However, this tragic event did not have any impact on the LoC’s functioning. Thus, it shows that trade could be considered a strong pillar of Indo-Pakistani relations’. 2005 and 2008 CBMs are still considered the largest peacebuilding measures implemented between India and Pakistan helping to see the border, not as an impenetrable border, but more assimilated to a door that
could be opened. Even though hopes were leaning on trade, remaining tensions led to the end of these efforts.
CHALLENGES AND LIMITS OF TRADE AS A PEACEBUILDING MEASURE
Although peacebuilding measures and dialogue had been implemented, tensions were
still omnipresent within Indo-Pakistani relations until reaching a point of no return. On February 14, 2019, a Pakistani suicide bomber targeted an Indian paramilitary convoy in Pulwama, Jammu and Kashmir. This tragic event caused 40 deaths but also marked the beginning of tensions’ revival between India and Pakistan. India immediately counterattacked through a historical measure that would define the future of its relations with Pakistan: the Jammu and Kashmir Reorganization Act. In August 2019, India decided to abrogate both the 370 and 35A articles that grant the autonomous status of Jammu and Kashmir that could, until August 2019, legislate its own laws except for certain matters®®. This decision changed the legislation of the territory that is now divided into two parts: Jammu and Kashmir and Ladakh, referred as the Union Territories of India. Since this decision, not only did trade end up, but diplomatic relations as well. They both took measures worsening trade and diplomatic relations against each other such as India imposing 200% tariffs on Pakistan, and the removal of the 1996 implemented status by Pakistan on India as a Most Favored Nation (MFN), to cite only a few”. This historical decision received strongly negative reactions from both parties, and even on the international stage that condemned the illegal Indian decision. It is only three years later that an nth ceasefire would be implemented in 2021 along the Line of Control, but trade did not restart since.
As we can see, CBMs neither prevented Indo-Pakistani relations from ending nor
peace from lasting in Kashmir. According to some sources, some ambiguities and flaws could have been anticipated within the trade CBMs. First, reports and literature on the subject all agree on the fact that there is a clear lack of clarity within the framework of the LoC since trade at the LoC was based on barter with no banking system. The absence of data did not enable trade to improve nor prevent illegal trade since no market analysis could be made’. Thus, if improving trade could hardly be made, implementing peacebuilding measures was de facto complex — if not impossible. Besides, the role of legal institutions remains unclear with de facto broad objectives. According to Asheya Saeed on her article on Trading for Peace in Kashmir, the Joint Chamber “failed to develop consensus on its future role and has been unable to engage proactively to set either the trade or the peace agenda’.” Besides, in a special report, Promoting Cross-LoC Trade in Kashmir by Moeed Yusuf, the latter argues that the Joint Chamber has seen its role reduced due to the lack of data and the poor leeway by the government within a bottom-up system”. Thus, there was no implementation of a clear “peace agenda”. When speaking about infrastructures, it is also crucial to mention all the
infrastructures including trading routes that had a bad influence on trade due to their states that did not facilitate trade.* Due to the bottom-up system, traders’ voices are barely listened to by upper institutions and the Government. Almost all the issues previously mentioned had been reported by traders but with no positive response (or no response). Among directly involved actors, Kashmiris have been the direct victims of Indo-Pakistani violence and remain unheard and their future had been decided by both New Delhi and Islamabad without considering the population’s perspective’. However, it does not mean that they have been quiet about it. Militants have been protesting against the lack of initiative that has been taken,
considering the origin of the conflict “We are not against trade but the intensity and the clamour about the trade is aimed at diverting the attention of the people from the core issue of Kashmir’, states Salahuddin’?.
Besides, other arguments had been made from a larger scale perspective that could
be considered as limits within the Kashmir conflict. In its article “Is Trade Key to Peace with India”, Syed Ali Zia Jaffrey highlights three main arguments that defend the idea that trade in Kashmir as a peacebuilding measure is not enough nor relevant to establish peace between India and Pakistan’?. First, the fact that Pakistan is in a delicate situation where reestablishing a dialogue with India would lead to some assumptions. Pakistan is divided between taking Kashmiris’ side who are also victims of India’s repressive policy and thus keeping conflictual relations with New Delhi, or on another hand, establishing diplomatic and peaceful relations with India, which would mean accepting the Jammu and Kashmir Reorganization Act. Besides, New Delhi’s repressive and expansionist policy does not seem in adequation with Islamabad. Besides, from an economic perspective, there is a unilateral balance of power between India and Pakistan since India does not benefit as much as Pakistan from these exchanges. Syed Ali Zia Jaffrey argues that trade is thus not based on a win-win situation. Finally, he argues that from a historical perspective, Indo-Pakistani relations have never been prone to peaceful relations. In fact, several ceasefires and CBMs had been implemented including several other attempts to appease tensions that could have large consequences, such as nuclear ones for example.
DISCUSSION OF RESULTS
We have seen in the two previous sections the different perspectives on trade
implemented as a peace instrument by taking different approaches to the conflict. Even though the 2005 and 2008 CBMs permitted establishing a common direction towards economic benefits and cooperation, trade has faced certain challenges due to missed opportunities that could have been avoided since there was a lack of directives that could have encouraged the peace process. Moreover, one of the main issues — if not the biggest — remains the lack of representation from the population that remains unheard and inactive in the conflict. In fact, Kashmiris’ real benefit from the trade, except the limited people-to-people interaction,
remained little considering the fact they have been victims of strong repressions as well. Thus, it is important to ask whether trade has not been seen as a preferable option for New Delhi and Islamabad to move their interest to another field and distance themselves from historical tensions that have been at the core of the conflict. Thus, the end of trade illustrates the fragility of Indo-Pakistani relations that can rapidly lead to the revival of tensions. Besides, in the case of the Kashmir conflict, trade may not be enough to build peace if it is the only ground where a dialogue is implemented. The Kashmir contlict finds its origins in its past characterized by its multidimensional aspect with multiple different issues that can not be resolved with the same instruments.
However, the past has proved that trade could be implemented as a relevant instrument within the peace process. Plus, new initiatives such as the emergence of youth entrepreneurship in Kashmir introducing new businesses in the region which directly translates the willingness of the youth to contribute to peace as well, whether it is related to trade or not’®. Indeed, the population of Kashmir has always been the direct victim of Indo- Pakistani conflictual relations, as states Amnesty International reports for example”®. However,
Kashmiris are legitimate to state their situations and through innovative initiatives, they can make their voices louder and fuel innovative dynamics within the population. Even though historical tensions remain in the region, it should neither frame the future of Indo-Pakistani relations nor Kashmiris’ future. Therefore, these peace initiatives should be encouraged and followed by institutional actions that could have a larger impact on the future of the three
territories. Then, Syed Ali Zya Jaffrey’s argument on the power balance should not be a limit to trade between India and Pakistan since they continued doing trade but through other countries such as Iran for example.
CONCLUSION
To finally answer the initial question, research proved us that trade can build peace within a conflict since it is supposed to provide conditions to establish a dialogue and framework favorable towards peace between parties. However, in the case of Kashmir, trade as a peacebuilding instrument has shown challenges, with remaining tensions and ambiguities, and limits that are crucial to take into account to adapt a peace agenda and a clear framework towards sustainable peace between India and Pakistan.
Considering the latter results, a few policy recommendations could be drawn on how
trade could be better instrumentalized as peacebuilding in the Kashmir region:
Modalities and the framework of trade need to be revised and clarified — through other CBMs for example —to prevent ambiguities which would help establish clear objectives towards trade and peace.
These revisions should include every actor involved in the conflict, either in
negotiations or through reported information on the field that could help to adapt and improve trade. Therefore, infrastructures have a key role to play in establishing a dialogue with clear peace-oriented directives through trade.
India and Pakistan should diversify their relations to establish more people-to-people contacts to establish strong bases on different domains that could appease historical tensions and future potential ones.
References and Notes
‘WATSON Paul. “India and Pakistan Agree to cease-Fire in Kashmir’, Los Angeles Times, November 26, 2003. Retrieved November, 23, 2024, from [India and Pakistan Agree to Cease- Fire in Kashmir – Los Angeles Times]
2 Ministry of External Affairs Government of India, “India-Pakistan Joint Press Statement,
Islamabad”, January 6, 2004. Retrieved November, 23, 2024, from [India-Pakistan Joint Press Statement, Islamabad]
3 HAFEEZ, Mahwish. “The Line of Control (LoC) Trade: A Ray of Hope”, Strategic Studies, Vol. 34, No. 1 (Spring 2014), pp. 74-93, Spring 2014. Retrieved November, 17, 2024, from [The Line of Control (LoC) Trade: A Ray of Hope A Ray of Hope on JSTOR]
*Conciliation resources. “Trading for Peace in Kashmir”, March 17, 2011. Retrieved November, 12, 2024, from [https://youtu.be/O_qvzM_6Wnl]
5 KLEIN, Diana. “Paix sans frontiéres building peace across borders”, p. 77-80, Accord an international review of peace initiated Conciliation Resources, January 2011. Retrieved November, 17, 2024, from [Cross-border peacebuilding | Conciliation Resources]
® BRIEF, Conciliation Resources. “Trading Confidence A Compelling Case For Cross Line of Control Trade”, November 2016. Retrieved November, 13, 2024, from [CLT-report-V10.pdf
7 SAEED, Ayesha. “Paix sans frontiéres building peace across borders”, Ayesha Saeed, p. 81- 84, Accord an international review of peace initiated, Conciliation Resources, January 2011.
Retrieved November, 17, 2024, from [Cross-border peacebuilding | Conciliation Resources] ® Foreign affairs, defense, finance and communication matters.
° Aljazeera. “Kashmir special status explained: What are Articles 370 and 35A”, August 5″, 2019. Retrieved November, 18, 2024, from [Kashmir special status explained: What are Articles 370 and 35A? | News| Al Jazeera__]
1 Shankar IAS Parliament. “Direct Trade between India and Pakistan”, September 8″ 2013. Retrieved November, 18, 2024, from [shankariasparliament.com/current-affairs/direct-trade- between-india-and-pakistan]
11 YUSUF, Moeed. “Promoting Cross-LoC Trade in Kashmir: An Analysis of the Joint
Chamber”, the United States Institute of Peace, August 2009. Retrieved November, 25, 2024, from [USIP Special Report: Promoting Cross-Loc Trade in Kashmir]
12 SENGUPTA, Dipanker, MAHMUD Ershad, CHOUDHARY, Zafar Iqbal. “Cross-Line of
Control Trade Peacebuilding and economic potential’, Conciliation Resources, June 2013. Retrieved November, 18, 2024, from [Cross-Line of Control Trade: Peacebuilding and economic potential — Research report | Conciliation Resources]
13 JAFFREY, Syed Ali. “Is Trade Key to Peace with India?”, Research Society of international Law, June 17″, 2022. Retrieved November, 20, 2024, from [Is Trade Key to Peace with India? ]
14 SAMI, Waleed. “What Are the Prospects for Reviving India-Pakistan Trade?”, The Diplomat, March 17, 2024. Retrieved November, 22, 2024, from [What Are the Prospects for Reviving India-Pakistan Trade? — The Diplomat]
15 Mercy Corps. “Youth Entrepreneurship in Kashmir: Challenges and Opportunities”, 2013. Retrieved November, 12, 2024, from [Youth Entrepreneurship in Kashmir: Challenges & Opportunities]
16 Amnesty International. “Situation Update and Analysis: Jammu and Kashmir after one year of abrogation of article 370°, August 2020. Retrieved November, 22, 2024, from [iammu_and_kashmir_after_one_year_of_abrogation_of_article_370.pdf]
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