Jubilant crowds celebrated today as Bangladesh and India swapped tiny islands of land, ending one of the world's most intractable border disputes that has kept thousands in stateless limbo for nearly seven decades.

As the clock struck one minute past midnight, thousands of people who have been living without schools, clinics or power for a generation erupted in cheers in celebration at their newfound citizenship.

"We have been in dark for 68 years," said Russel Khandaker, 20, as he danced with friends in the Dashiar Chhara enclave, which belonged to India but has now became part of Bangladesh.

A total of 162 tiny enclaves -- 111 in Bangladesh and 51 in India -- were officially handed over to the countries surrounding them after Dhaka and New Delhi struck a border agreement in June.

The land-swap means some 50,000 people who have been living without a state to call their own since 1947 will now officially become part of the countries that surround their homes.

In Bangladesh, thousands of people defied monsoon rains to celebrate, staging patriotic marches and lighting 68 candles to mark the end of "68 years of endless pain and indignity".

"We were Indian citizens in names but cut off from the mainland. With the transfer, we've now become Bangladeshi citizens and can now access all citizenship benefits," said Khandaker. "We've finally seen the light," he told AFP. Maidul Islam, 18, added: "We're now human being with full human rights."