Revisiting India Pakistan Cross-LoC Trade

Duty-free barter trade across the Line of Control from two points in Jammu and Kashmir has grown since its initiation as a confi dence building measure in 2008. Despite growing volumes, traders face several logistical and policy hurdles that mean risky returns on trade and high transaction costs. The governments of India and Pakistan must formalise trade between the two parts of Kashmir to reduce transaction costs, uncertainties of barter trade, and trade distortions caused by duty-free trade to overall India-Pakistan trade.