MONETIZATION OF THE CROSS LOC TRADE FOR THE SUSTAINABLE DEVELOPMENT OF KASHMIR REGION

The issue of Kashmir has been the bone of contention between India and Pakistan for the last 60 plus years now. After the signing of Shimla agreement in 1972, the state of Kashmir was divided into two parts the Pakistan Occupied Kashmir (POK) on the Pakistani side and Jammu & Kashmir (J&K) on the Indian side. Since then the trade and travel routes between the two sides were closed. It was only after the cease fire agreement of 2003 that both the countries commenced the composite dialogue process. Though the initiation of cross LoC trade in 2008 was seen as a positive step in this process but it has its impediments also, the biggest one being that of settling transactions monetarily. This paper tries to identify the problem with the current barter model and the limited basket of commodities allowed for trade, and tries to address those problems with a proper monetary settlement mechanism.