Letters of credit (L/Cs) may help advance the peace process between India and Pakistan by easing relations between people on either side of the Line of Control - the de facto border created by the military control line between the Indian and Pakistani controlled parts of the former state of Jammu and Kashmir.

India's Prime Minister Manmohan Singh has said his government is ready to discuss initiatives to strengthen relations between communities on either side of the Line of Control, though he has not toned down calls from New Delhi for Islamabad to eliminate the threat that Pakistan-based terrorist groups pose to India.

Trade facilitation

The Indian prime minister has stressed that the facilitation of trade across the Line of Control would be an important element in relationship building in the area.

"Trade facilities at the border are inadequate. There are no banking channels. Customs facilities need to be strengthened. There are no trade fairs. The lists of tradable commodities need to be increased," he said in a recent speech.

Stakeholder calls

Singh is responding to the calls of various stakeholders in Jammu and Kashmir, one of which is for the two governments to work out L/C arrangements to facilitate trade in the area.

Meanwhile, the Jammu Traders Association is calling for an easing of border procedures, including streamlined administration and an increase in the current weight restriction for trucks engaged in trade across the Line of Control.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.