The Nathu La border pass, once part of the famed Silk Road trade route sitting 4,545 meters (14,998 feet) above sea level, was closed in 1962 when the two countries fought a brief border war in the Himalayan region.

But with relations improving in the economic, political and even military fields, the two sides decided it was finally time to reopen the pass, which sits between the Indian state of Sikkim and China's Tibet.

The reopening of Nathu La was initially agreed to in 2003 during an historic visit to Beijing by then-Indian prime minister Atal Bihari Vajpayee.

Since then, the two nations have pushed for greater trade to tap a total consumer market of 2.3 billion people. Bilateral trade reached 18.73 billion dollars last year, up 37.5 percent from 2004, according to Chinese statistics.

Nathu La was a major trading point between the two countries before the 1962 war and its reopening is aimed at restoring the region's former trading glory.

A study conducted by the Sikkim government said trade via the pass could reach 12 billion dollars by 2015.

Chinese state press reports, citing Tibetan trade officials, have given more modest assessments, saying goods traveling through the pass could eventually make up 10 percent of overall trade between the two nations.

However China intends to make Yadong, the border city on the Tibetan side that is also known as Chomo in Tibetan, the biggest free-market border town in southwest China, state press said.