The government has suspended the LoC trade in Jammu and Kashmir from Friday, April 19.
The Home Ministry has issued an order in this regard.
The decision was taken as the government has been receiving reports that the Cross LoC trade routes are being misused by the Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency.
The LoC trade is meant to facilitate the exchange of goods of common use between local populations across the LoC in Jammu and Kashmir.
The trade is allowed through two Trade Facilitation Centres located at Salamabad, Uri, District Baramulla and Chakkan-da-Bagh of District Poonch. The trade is based on the Barter system and zero duty basis.
The Ministry said, the reports have been received that the LoC trade is being misused on a very large scale. It said, unscrupulous and anti-national elements are using the route as a conduit for Hawala money, drugs and weapons, under the garb of this trade.
After the Pulwama incident, Government had withdrawn the Most Favoured Nation status to Pakistan. The Home Ministry said, inputs have also been received that in order to evade the consequent higher duty, LoC trade is likely to be misused to a much larger extent.
Sources in the Ministry said, the main objective of allowing LoC trade between Jammu and Kashmir and Pakistan occupied areas of Jammu and Kashmir was to encourage local trade and exchange of locally made and grown products.