The chief minister in charge of the Indian state which Pakistan claims is illegally occupied by India is calling for more trade between the two countries to improve relations.

Chief Minister of Jammu and Kashmir, Omar Abdullah, wants to see such trade facilitated by letters of credit (L/Cs) so that goods can flow more easily across the Line of Control (LoC) which separates the Indian state from Pakistan controlled territories.

Bilateral efforts

India and Pakistan have both made efforts over recent years to improve relations across the LoC by improving bilateral trade but connectivity between the two countries remains poor.

Abdullah wants to see three measures to facilitate cross-border goods flows, which are currently limited to barter arrangements, mainly in agricultural produce.

L/C priority

The minister first wants to see L/Cs made available to improve trade relations, but recognises that banking relations between Pakistan and India are insufficient to provide a basis for widespread L/C access.

Abdullah therefore suggests that L/Cs and other banking relations between traders on either side of the LoC could be supported by banks based in Dubai rather than financial institutions in India and Pakistan.

Other measures

Currently only a few specified goods can be traded across the LoC, and Abdullah's second measure calls for a list of products that cannot be traded between the two countries, which he says should replace the small list of specified goods that can be traded.

Thirdly, Abdullah wants to see telecommunications networks legalised and opened up to connect the two countries by phone.

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