Rangelands cover around half of the planet’s landmass and provide vital ecosystem services to over a quarter of humanity. The Himalayan rangelands, part of a global biodiversity hotspot is among the most threatened regions in the world. In rangelands of many developing nations policies banning grazing in protected areas is common practice. In 1998, the Indian state of Sikkim, in the Eastern Himalaya, enacted a grazing ban in response to growing anthropogenic pressure in pastures and forests that was presumably leading to degradation of biodiversity. Studies from the region demonstrate the grazing ban has had some beneficial results in the form of increased carbon stocks and regeneration of some species of conservation value but the ban also resulted in negative outcomes such as reduced household incomes, increase in monocultures in lowlands, decreased manure production in a state that exclusively practices organic farming, the spread of gregarious species, and a perceived increase in human-wildlife conflict. This paper explores the impact of the traditional pastoral system on high elevation plant species in Lachen valley, one of the few regions of Sikkim where the grazing ban was not implemented. Experimental plots were laid in along an elevation gradient in grazed and ungrazed areas. Ungrazed areas are part of pastures that have been fenced off (preventing grazing) for over a decade and used by the locals for hay formation. I quantified plant species diversity (Species richness, Shannon index, Simpson diversity index, and Pielou evenness index) and ecosystem function (above ground net primary productivity ANPP). The difference method using movable exclosure cages was used in grazing areas to account for plant ANPP ate and regrowth between grazing periods). The results demonstrate that grazing significantly contributes to greater plant species diversity (Species richness, Shannon index, Simpson diversity index, and Pielou evenness index) and ecosystem function (using above-ground net primary productivity as an indicator). The multidimensional scaling and ANOSIM (Analysis of Similarities) pointed to significant differences in plant species assemblages in grazed and ungrazed areas. Further, ecosystem function is controlled by grazing, rainfall, and elevation. Thus, the traditional transhumant pastoral system may enhance biodiversity and ecosystem function. I argue that a complete restriction of open grazing meets neither conservation nor socioeconomic goals. Evidence-based policies are required to conserve the rich and vulnerable biodiversity of the region.