The two Asian giants agreed in 2003 to set up their first direct trade link in over 40 years at the 15,000-feet (4,545 metre) Nathu La Pass on the border between India's Sikkim state and China's Tibet region.

"Formal trading with China at Nathu La will begin by July this year and 13 more new border trading points with Pakistan, Bangladesh and Nepal will be opened soon," Indias commerce minister Jairam Ramesh told journalists in Guwahati, the main city in the northeastern state of Assam.

Ramesh said the country would also have eight trading centers with Bangladesh, four with Nepal and one with Pakistan in another three years, built at a cost of nine billion rupees (198 million dollars).

Both India and China -- the world's most populous countries -- have pushed for greater trade to tap a total consumer market of 2.3 billion people.

Bilateral trade now is running at around 14 billion dollars annually.

Nathu La was a major trading point between India and China before a border war in 1962. It was also one of the main arteries of the Silk Road which historically linked China via Central Asia to Europe.

Initial trade is expected to be made up of much the same goods as during the former Silk Road days, with a few modern additions. Chinese exports will include silk and raw wool, while Indian exports are expected to include farm products, textiles, watches and shoes.

Last May, the countries agreed that previously disputed Sikkim belonged to India and said they would work to resolve other border issues.

India says China occupies 38,000 square kilometres (14,670 square miles) of Indian territory. Beijing claims the remote Indian state of Arunachal Pradesh.

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