India suspended cross-border trade with Pakistan administered Kashmir accusing the government of funnelling weapons and drugs and promoting terrorism in the Kashmir Valley.
Trade across the Line of Control (LoC) has served as a confidence-building measure and to help the local population. But tensions between India and Pakistan have been running high since the February 14 Pulwama suicide attack in Jammu and Kashmir.
On Thursday, the Indian home ministry claimed that it had been receiving information that “militant groups” were using the cross-border route to send arms, drugs and fake Indian currency.
“Unscrupulous and anti-national elements are using the route as a conduit for money, drugs and weapons, under the garb of this trade,” the ministry said.
It added that inquiries by the National Investigation Agency had shown a significant number of firms engaged in the cross-border trade were being operated by people with links to militant groups. However, It did not name anyone.
Trade operates on a barter system, where no money is exchanged. Indian traders export cumin, chilli pepper, cloth, cardamom, bananas, pomegranate, grapes and almonds. Prayer mats, carpets, cloth, oranges, mangos and herbs return from the Pakistani side.