In Changthang, south east of Ladakh, smugglers carry essential commodities like rice, wheat, vegetables, cigarettes, bidi and cooking oil.
In exchange, Indian smugglers sell Pashmina shawls, Chinese crockery, toys, electronic items and blankets, said civil and military officials in Ladakh area.
The officers said that during Olympics 2008, Beijing, the Chinese put up two temporary shelters in Dumchele area opposite to India's Changthang area to trade with their Indian counterparts, goods worth several crores of rupees.
The officials reasoned that China allowed smuggling to maintain the essential supplies to western Tibet area from the mainland China.
However, with Tibetan protests during Olympics, the Chinese sealed the borders.
Recently, the Customs established a check post at Nyoma and initiated a crackdown on the traders carrying the smuggling racket although nothing much was achieved.