Cross-LOC trade was the biggest CBM decided on during the visit of Indian Foreign Minister, Pranab Mukherjee, to Islamabad on 21 May 2008. A meeting of the joint working group on cross-LOC CBMs on 22 September 2008, finalized the terms and conditions for duty-free trade between the two parts of Kashmir. In the first phase, 21 items were approved for import and export including carpets, shawls, namdas, gabas, embroidery items, fruits, vegetables, dry fruits, saffron, imli, rajmash, kashmiri spices, foam matteress, medicinal herbs, jahnamaz, tusbies, precious stones, peshawari chapple, maize, maize products, honey and rice.

On 28 October 2008, J&K Governor, NN Vohra, laid the foundation stone for a cross-LOC trade centre complex at Ranger, which includes a truck terminal station, X-ray building, examination hall, security complex, custodian office, immigration office, plant quarantine office and ancillary buildings. Earlier on 21 October, the Governor had flagged in the trade from Islamabad-Uri while on the same day the Advisor to the Governor HH Tayabji flagged off three loaded trucks from the Poonch trade centre towards Rawalakote across the LOC. On 22 October, Raja Zulkarnain, President of POK, inaugurated the truck service from the other side at Chakan Wala Bagh.

There were great expectations at the start of the trade. However, no trade transactions could take place through Poonch-Rawalakote sector due to various reasons. First, there is a gap in communications as there are no telephonic links between the two parts of Kashmir. Second, the items approved in trade list by both countries are not popular on the other side of the LOC. For example, basmati rice, and maize products have been included in POK lists while basmati is Rs.110 per kg and maize flour is Rs.27 per kg in POK as compared to Rs.55 and Rs.12 per kg respectively on this side. The traders of Jammu lost interest because the items produced and manufactured at Jammu and which are cheaper and marketable in POK are not in the approved list.

Recently an effort was made by district administration of Poonch and Rawalakote who allowed a meeting of traders from both sides, on 5 November at Chakan Da Bagh Tetrinote zero point, so that they could interact, establish their personal relations, know the rates of approved items on the other side and place the orders. 25 traders of Poonch, Surankote and Mendhar participated in this interaction from Indian side under the chairmanship of President of the Beopar Mandal Poonch, Inder Raj Sharma while the 43 -member trade delegation of POK was led by Abdul Hamid Afzal President Anjuman-e-Tajran Rawalakote.

While initiating the discussion Afzal welcomed the decisions of both the countries for organizing this meeting and said that unless communication links are established, trade could not flourish across the LOC. He demanded that a delegation of the traders of Rawalakote and Poonch be allowed to visit the nearest mandis, trade centres and factories on the other side so that after assessing the rates and quality, profitable items, could be imported or exported.

Inder Raj Sharma said that those items which are cheaper in Poonch and marketable at Rawalakote may be allowed for export and vice versa. Mohd. Zareen a drug distributor of Rawalakote said that the rates of drugs in POK are extremely high as for example in the case of the Aciloc tablet which is being sold at Re.1 per tablet in Poonch bazaar but costs Rs.6 per tablet in Rawalakote bazaar. Therefore, pharmaceutical drugs may also be included in the trade list.

The President of the Anjuman-e-Tajran of Hajira, Molvi Latief said that POK traders are interested in importing mutton, poultry, onion, potato and so on from Poonch which are very costly in Rawalakote. For example, mutton is being sold at Rs.120 per kg in Poonch market but at Hajira across the LOC it costs Rs.270 per kg. Similarly, as per the report of the J&K Agriculture Department, the maize production in Poonch district during 2008 was 72,000 metric tonnes and 20,000 metric tonnes of maize is at present being exported to Jammu and other places. With the inclusion of maize in the trade list for export from Poonch to Rawalakote, the traders will get nearer mandis across the LOC and earn more money for their product. The traders of Poonch have also shown interest in importing salt and cement from POK which are not included in the approved list. They also demanded a courier service from Poonch to Rawalakote. The Divisional Commissioner of POK-held Poonch, Shoket Malik promised to initiate a proposal to the Pakistan government for invitation of a traders' delegation from Poonch to Rawalakote and inclusion of those items in trade list which are cheaper and marketable on the other side of the LOC.

The President, Jammu Chamber of Commerce and Industries, Ram Sahai, said that due to lack of communication traders experienced difficulty in carrying out trade. He said that government has allowed only 1.5-ton trucks across the LOC which cost Rs.3,200 per trip from Poonch to Rawalakote and demanded instead that 9- to 10-ton trucks be allowed which would reduce freight charges.

Thus, unless a proper communication system between the traders is established, items profitable and marketable on the other side are not included in the trade list and heavy trucks for transportation are not used, trade prospects across LOC cannot become brighter.