Cross-border movement was put on hold after Indian police claimed to have seized a consignment of narcotics from a truck arriving from the Pakistani side of Kashmir.
Pakistan had protested the arrest of the driver, sparking a stand off that left scores of trucks stranded on either side of the border.
Officials from Indian-held Kashmir said trade resumed after “extraordinary efforts” by both sides.
Deputy Commissioner of the northern Baramulla district Talat Parvaiz said a fresh convoy of trucks was sent to Pakistan-held Kashmir on Thursday.
“We have allowed 21 trucks of the other side to cross the LoC (Line of Control) and our 50 trucks that were stranded on that side have reached back into our side,” he said.
Police sources confirmed the arrested truck driver was still under police custody.
Kashmir, a Muslim-majority Himalayan region, is held by India and Pakistan in parts and claimed by both in full.
The two countries have fought three wars – in 1948, 1965 and 1971 – since they were partitioned in 1947, two of which were fought over Kashmir.
Since 1989, Kashmiri resistance groups in IHK have been fighting against Indian rule for independence, or for unification with neighboring Pakistan.
More than 70,000 people have reportedly been killed in the conflict so far.