At the stroke of midnight Friday, tens of thousands of stateless people who were stranded for decades along the poorly defined border between India and Bangladesh will finally get to choose their citizenship, as the two countries swapped more than 150 pockets of land to settle the demarcation line dividing them.

Television images showed people bursting firecrackers and raising an Indian flag in the Masaldanga enclave, which became part of India. On the other side of the new border, thousands of people who have been living in the enclaves in Bangladesh cheered, danced and chanted "Bangladesh, Bangladesh."

They lit 68 candles and released 68 balloons, then marched through the village of Dashiarchhara, highlighting that it took 68 years to settle the border dispute. The village in Kurigram district is 240 kilometers (150 miles) north of Dhaka, the Bangladeshi capital.

India's External Affairs Ministry described July 31 as a historic day for both India and Bangladesh as "it marks the resolution of a complex issue that has lingered since independence" from British colonialists in 1947.

"We are very happy, our children will no more need to hide their identity to go to schools," said Bashir Mia, 46. Many people posed as Bangladeshis to get their children admitted to schools in Bangladesh.

"We are free now, we are Bangladeshis," he added.

Nearly 37,000 people lived in 111 Indian enclaves inside Bangladesh, while 14,000 lived in 51 Bangladeshi enclaves in India. They are now getting citizenship of their choice after the agreement between the two countries took effect at midnight Friday. 

Relations between India and its smaller neighbor Bangladesh have significantly improved since Bangladesh Prime Minister Sheikh Hasina promised that her administration would not allow India's separatist insurgents to use the porous 4,000-kilometer (2,500 mile) border to carry out raids in India.

Aided by India, Bangladesh gained independence from Pakistan following a bloody nine-month war in 1971. The boundary dispute has been lingering since British colonialists carved Pakistan out of India in 1947, and granted independence to the two countries.

None from Bangladeshi enclaves within India opted for Bangladesh, while 979 people from Indian enclaves living inside Bangladesh applied for Indian citizenship, said Akhteruzzman Azad, chief government administrator at Kurigram district in Bangladesh.

The shifting of the people to the Indian side would be completed by November this year.

Several television news channels in both the countries broadcast the celebrations live.

"This will end nearly seven decades of deprivation the people living in the enclaves have had to suffer being virtually owned by no one," said the Bangladeshi English language "Daily Star" newspaper.

The two countries are implementing the Land Boundary Agreement in line with a deal signed in 1974, and approved by India's Parliament recently.

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Associated Press writer Julhas Alam in Dhaka, Bangladesh, contributed to this report.