The opening of the Nathu La pass on Thursday was the latest in a string of measures the two neighbours have taken in recent years to end decades of mutual suspicion rooted in a 1962 border war.
The 4,300 meter-high (14,000-foot) pass, once part of the famed Silk Road, lies between India's northeastern state of Sikkim and China's Tibet region.
As military brass bands sent festive notes swirling into the mountain mist, Pawan Kumar Chamling, Sikkim's chief minister, and Champa Phuntsok, the Chinese-appointed leader of Tibet, cut a red ribbon to throw open the link.
Troops from both sides mixed freely helping to set up the event. Many of the Chinese soldiers brandished cameras instead of guns.
Businessmen from both sides crossed into each other's territory by bus to attend trade fairs after the ceremony. The visits are to be symbolic and no one will carry goods, said S.P. Subba, who heads Sikkim's Industries Directorate.
"It is not just symbolic, we mean business"
China's ambassador to India
But China views the pass as more than just a symbol, said Sun Yuxi, China's ambassador to New Delhi. "It is not just symbolic, we mean business," Yuxi said before crossing over the border into China.
While trade through Nathu La will be duty-free, Indian exports are limited for now to an approved 29 commodities, mostly food items. The Chinese traders are restricted to bringing in 15 types of goods, including goat and sheep skins, wool and herbs.
The pass has been thoroughly modernised ahead of the opening with customs facilities, bank, Internet cafe and ATM -- the last two thought to be the highest in the world.