Purchase of scanners for LoC trade stuck in files as ministries lack consensus

NEW DELHI:The decade-old barter trading system along the border in Kashmir, now being probed by the National Investigation Agency (NIA), is vulnerable to abuse because the purchase of crucial container scanners that can check for weapons and other illegal items is apparently stuck in limbo.

The ministries of defence, finance and home affairs have been unable to find agreement on the much-needed acquisition, said three people familiar with the matter.

NIA, India’s apex counter-terrorism agency, is examining the use of the route to send across weapons and cash for terror activities and money for separatist organisations, narcotics and mobile SIM cards. It’s also looking at mis-declaration of items, the import of third-country goods and wrong valuations.

The issue has been flagged at various levels, especially in the backdrop of the upsurge in violence in Kashmir, said two of the three people cited above.

India and Pakistan had in 2008, as part of confidence-building measures, allowed duty-free barter trade in select goods along the Line of Control (LoC) Control in Jammu and Kashmir.

Two trade facilitation centres (TFCs) were set up at Salamabad and Chakkan-da-Bagh for the purpose.

Trade was restricted to goods and products made in the Kashmir region and only on barter.

Initially, the items included textiles, fruits, shawls and dupattas. Later, some more items, including dry fruits, herbs and plant produce, were added.



It was then decided that the ministry of defence will provide container scanners at the two locations.

“The trade facilitation centre is yet to get scanners,” said a person familiar with the matter.

This has made it hard to check vehicles passing through. One such truck, said to be transporting merchandise, was found to be carrying weapons when intercepted and searched by security forces. A truck scanner would have easily detected such attempts at the border itself.

VIOLATIONS GALORE
It’s not just scanners. The weighbridges only work intermittently, allowing frequent tonnage violations, said one person.

The concept of barter is also open to abuse — like equating a truckload of almonds to one of cumins or oranges and bananas, with the first of greater value.

The suspicion is that the difference is being used to fund terrorism or other illegal activities.

From almonds to shawls and stoles, the agency has found widespread mis-declarations in value, volume as also bringing in of third-country goods. For example, Californian almonds are being rerouted through the LoC due to the lower duty as against the normal trade avenue. Interestingly, most of the country’s almonds now come from this route.

NIA is also looking at instances of under and over-invoicing of goods such as woollen stoles and shawls and diversion of funds to terror organisations.

The agency suspects that goods exceeding the stated value and volume were being sent out, apart from contraband, to provide funds for terror.

The state government is the custodian of the scheme and is supposed to maintain a passbook that lists the total value of imports and exports and reconcile them every quarter.

Another point to note is that the entire trade is managed by 600 firms, about 300 for each TFC. But a number of these are just front companies, said a person with knowledge of the matter. “Trade is largely dominated by a few firms,” said a source. Of these, some are active on the route.

Some of these firms that allegedly work as a front for others are now under the NIA scanner. The agency has got thousands of documents as part of investigations into past deals it suspects were used to fund some terror operations.