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Sun Shihai, deputy director of the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences, said China and India have showed growing mutual trust by "turning a battlefield into a market."

"Reopening the pass will help promote closer economic and personnel exchanges along the border," he told China Daily.

"What's more important, it will also help push forward Sino-Indian political relations and contribute to regional stability and security."

The researcher added that China and India, two of the fastest-growing economies, enjoy bright prospects for economic and trade co-operation.

China is India's second largest trade partner only after the United States. Bilateral trade shot up to US$18.7 billion in 2005 from US$1.16 billion in 1995, with a surplus of US$833 million for India.

Trade in 2006 is predicted to surpass the 2008 target of US$20 billion set by the two governments.