After 44 years of its closure, India and China have reached a historic agreement to resume border trade through the strategic Nathu La Pass from July 6.
The reopening of Nathu La pass is likely to help promote bilateral trade and give a major boost to the local economies of the land-locked mountainous regions of both countries.
Trading through Nathu La Pass accounted for 80 per cent of the total border trade volume between China and India in the early 20th century. However, trading through this pass was suspended in 1962 after the India-China border conflict.
The Nathu La Pass is 4,545 meters above sea level. It is 460 km away from Lhasa and 550 km from Kolkata. The pass used to be an important trade passage between China and India and part of the fabled 'Silk Route.' Currently China and India trade mostly through sea route.
China and India recorded $ 18.73 billion in trade volume in 2005, up 37.5 per cent from the previous year, according to the Chinese Ministry of Commerce. The volume is expected to exceed $ 20 billion this year.
India and China are celebrating 2006 as the year of Sino-Indian friendship.
However some analysts say that Beijing stands to gain immensely by transporting goods through India. At present, China uses transit facilities offered by Myanmar to service land-locked Tibet by sea. But with Kolkata port merely 550km from Tibet, the revival of cross-border trade at Nathu La will dramatically slash the distance Chinese goods have to travel.