Our correspondent says that the overwhelming majority of separatist groups in Indian administered Kashmir have welcomed the move - while most militants groups have not commented.
Hundreds of people gathered to watch NN Vohra, the governor of Jammu and Kashmir state, flag off the lorries in a brief ceremony.
Thirteen trucks, most carrying fresh fruit, began their journey towards the de facto border, accompanied by the beating of drums and singing by school children.
"I'm very happy that trade has been renewed after six decades. But I still don't now how traders like me would get their money for their goods," trader Haji Farooq Ahmad told the BBC.
On the Pakistani side the atmosphere was one of equal excitement.
Two lorries carrying goods from Pakistani-administered Kashmir crossed the LoC in Chakothi sector and entered Indian-administered Kashmir before dawn.
The Prime Minister of Pakistani-administered Kashmir, Sardar Atique Ahmad Khan, was present to see off the lorries.
Officials said 14 more trucks carrying rice, onions, garlic, spices, dried fruit and shoes were due to leave Muzaffarabad, the capital of Pakistani-administered Kashmir, for Salamabad later on Tuesday.
Under the terms of the deal, lorry drivers from both sides are being issued single-entry permits to transport the goods.
Drivers from the Indian side will offload their goods at Chakothi, from where they will be picked up by Pakistani lorries.
Drivers from the Pakistani side will likewise drop their goods off at Salamabad, where they will be collected by Indian lorries.
Trade is restricted for now to 21 items produced in the Kashmir region.
Economists say that the reopening of the trade route is highly significant, because the Srinagar-Muzaffarabad road is an all-weather road - unlike other roads linking Srinagar with India that become cut off when it snows.
In addition, the route offers the shortest route for Srinagar's produce to reach its markets.
Intra-Kashmir trade was mooted in 2004 as part of the peace process between India and Pakistan.
Analysts say trade between the two countries could reach $6bn a year if both sides ease restrictions.
In recent weeks, Indian-administered Kashmir has seen massive protests against Indian rule.
Some 30 people have been killed in clashes between protesters and Indian security forces in the protests.
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