From correspondents in Sikkim, India, 10:45 AM IST

Nathu La (Sikkim) - History was made Thursday morning when the Silk Road along the Himalayas was opened for border trade between India and China after 44 years.

The Nathu La Pass on the border between India's Sikkim state and China's Tibet region was thrown open with the cutting of a red silk ribbon by Sikkim Chief Minister Pawan Kumar Chamling and Tibet Autonomous Region chairman C. Phuntso.

Brass bands from both the countries struck up tunes as both the leaders cut open the ribbon at the 15,000-foot(4,545-metre)-high pass at around 9.45 a.m.

Indian traders crossed over to the Chinese side with silk scarves to welcome their Chinese counterparts.

'This is the beginning of a new era of hope and prosperity and the improving of bilateral ties between both nations,' said Phuntso in his remarks at the ceremony.

'This is not just a trade route, but a cultural highway. It will take India-China trade to new heights,' said Chamling.

Goods were displayed on both sides at the trade marts set up and the entire area was bustling with officials, security personnel and eager locals.

The reopening of the Nathu La Pass, 52 km (33 miles) east of Sikkim capital Gangtok, is the first direct trade link since a 1962 border war between the two countries.

'The reopening of border trade is seen as an instrument for economic development for this region,' Chief Minister Chamling told IANS.

Chinese Ambassador to India Sun Yuxi told IANS: 'This is not just symbolic trade but, we hope, it would help to improve relations between the countries. Today the border is open for trade and we hope the border will soon open for tourists and a bus service from Gangtok to Lhasa very soon. We are excited and feel really good.'

Despite the sweeping rains, dense clouds and freezing temperature, the Himalayan pass echoed Thursday with Hindi film music and Chinese songs. The atmosphere was full of bonhomie with soldiers from both sides shaking hands and clicking pictures, though wielding their automatic weapons.

For the first time in 44 years since the bloody winter war between the two countries, this heavily guarded border separated by a barbed wire fence had a relaxed look as frontier guards on either side exchanged friendly gestures and pleasantries.

The Chinese delegation led by Phuntso crossed over to the Indian side along with some 100 Tibetan traders after the border was thrown open.

A group of 100 Indian traders led by 80-year-old businessman Motilal Lakhotia set foot on Chinese soil and made their way to the trade mart at Renqinggang located some 10 km from Nathu La.

'I am thrilled at the prospect of being part of history,' said Lakhotia, a prosperous businessman in Gangtok.

Lakhotia had businesses in Lhasa before the 1962 war broke.

The Chinese traders are to move to Sherathang, a small hamlet five km below the Nathu La Pass, where the main business hub is located for the Chinese to trade their commodities.

The trade mart at Sherathang spread over eight acres have 29 pre-fabricated

tin sheds to handle customs and immigration, security posts, a telecommunication centre, a branch of the State Bank of India (US dollar is the currency to be used for trade), besides facilities for quarantine and power generation.

'The Chinese traders would probably not come to trade on the inaugural day as this is something symbolic,' Sikkim's director of industries Saman Prasad Subba had said.

Business would be duty-free with India being able to export 29 items ranging from textiles and blankets, agricultural implements, liquor, cigarettes, tea, barley, rice, vegetable oil, and local herbs. Chinese traders would be able to trade in 15 items from horses to goats and sheep, yak tail, yak hair, goat skin, wool, and raw silk.

A study conducted by the Sikkim government says bilateral trade was expected to reach $12 billion by 2015.

'Trading would take place four days a week from Monday to Thursday between 7.30 a.m. (Indian Time) to 3.30 p.m. A total of 100 traders and 60 trucks carrying goods will be allowed to operate from either side of the border,' Subba said.

As per modalities worked out between the two countries, normal trade would begin each year on June 1 and continue till Sep 30, as the area would become impassable after that due to heavy snow, freezing weather and high velocity winds.

'We hope this trade brings in economic growth to the area,' said Sonam Bhutia, a local trader hailing from a village close to Nathu La.

Nathu La was a major trading point between the two countries before the 1962 war. It was also one of the main arteries of the Silk Road, which historically linked China via Central Asia to Europe. The Silk Route stretch from Lhasa to Gangtok was 563 km long.

Beijing had in 2003 given up its territorial claim over the Indian state of Sikkim.

(Staff Writer, © IANS)