China's refusal to concede India's sovereignty over Sikkim has been one of the major thorns in the relations between the two nations.

But recent media reports indicate that both New Delhi and Beijing are burning the midnight oil to arrive at a resolution to this issue to coincide with Prime Minister Atal Bihari Vajpayee's visit to China later this month.

Sikkim, which has the Tibetan plateau in the north and east, Nepal in the west, the state of West Bengal in the south and Bhutan in the southeast, was a British protectorate from 1886 until India became independent in 1947.

In 1950, a treaty signed between India and Sikkim ratified the status of Sikkim as an Indian protectorate with the Chogyal as the monarch. But differences between the Chogyal and those seeking a union with India finally led to the total collapse of the administration, and the government that came in subsequently decided to become the 22nd state of India on May 16, 1975.

China, however, refused to acknowledge this accession to India, insisting that it was a forcible annexation by India.  And till today, Chinese maps continue to portray Sikkim as an independent country.

Till the mid 1990s, there were regular instances of people from Sikkim being denied visas to China, even if they were listed as part of an Indian government delegation.

The situation eased somewhat after then Prime Minister PV Narasimha Rao's visit to China in September 1993, and the visit to India three years later by Chinese President Jiang Zemin.

While Rao signed the Agreement on Border Peace and Tranquillity in Beijing, Jiang inked the Agreement on Confidence Building Measures in the Military Field along the LAC in the India-China Border Areas.

In July 2001, Foreign Secretary Chokila Iyer, who is from Sikkim, flew into Beijing to head the 13th meeting of the Joint Working Group on boundary issues.

The main reason for China's willingness to negotiate on the issue is economic.

The landlocked state was a key part of the traditional silk trade route from Tibet to the Bay of Bengal. As China expert Shrikant Kondapalli put it, 'Sikkim is the lifeline of Tibet. For the better management of Tibet China needs to regularise food supplies through Sikkim.'

But after the 1962 border war with China, Nathu La and Jelep La, the two main passes, which connect Sikkim with Tibet, were closed for trade.

Lhasa is barely 425 km from Nathu La, which is at a height of 4,290-metres.

The closure of these passes deprived Sikkim of a major trade route, and each successive state government since 1975 has lobbied for the reopening of trade through these passes, which would give the state's economy a badly needed boost.  But so far it has been in vain.

In fact, the closely guarded Nathu La -- where Chinese and Indian soldiers are camped within shouting distance of each other -- is still off limits to foreigners, though US ambassador Robert Blackwill gave Chinese soldiers the chance to photograph him during his visit there February 1, 2002 as part of his tour of India's borders with China and Myanmar.

Since the 1990s, there were growing Chinese attempts to resolve the issue. Their initial thrust, essentially, was that Beijing was ready to officially recognize Sikkim as a part of India if India would give up its claim to Aksai Chin, a 38,000 square km chunk of Kashmir, which has been under Chinese occupation since the early 1950s.

The area is strategically crucial for Beijing because it contains a major all-weather road between Tibet and Xinjiang, Lhasa to Kashgar. This road, built and maintained at much cost by China, runs through such remote and inhospitable terrain and heights, mostly over 4000 metres that it took India nearly a decade to realise that the Chinese were building it.

India, however, continues to insist that Aksai Chin is Indian territory illegally occupied by China.

Some experts believe that conceding Aksai Chin to China -- given that it is fait accompli--- and in turn get official Chinese recognition of Sikkim as a part of India would dramatically ease the border problem between the two nations.

But others wonder why China's recognition should matter so much, and whether accepting China's occupation of a part of Kashmir would not set a precedent that could be applied for the part occupied by Pakistan.

So far, India has refused to accept the Chinese terms.

Beijing has also pointed out that the resumption of trade and the setting up of customs posts along the pass by both sides would imply a de-facto Chinese recognition of Sikkim's merger with India, and official de jure recognition could come later.

India, however, wants a legal recognition first.

"I think the Chinese government is willing to formally recognise Sikkim as part of India if New Delhi agrees to reopen the main trade route and resume border trade between Tibet Autonomous Region and Sikkim," former  Chinese ambassador to India (91-94) Chen Ruisheng said in a statement in Beijing in May 1999, just before the 11th round of the  Joint Working Group meeting on the China-India boundary issue.

He said that as a first step, the two countries should forge a bilateral agreement on the resumption of border trade between Tibet and Sikkim.  However, Chen, now a senior adviser with the China Institute of International Studies (CIIS), said Beijing may not be willing to accept India's demand for a formal statement accepting Sikkim as an Indian state, since it involved the sovereignty and territorial integrity of the country.

The recent spate of media reports predicting Chinese acceptance of Sikkim's status as an Indian state are based on Chinese foreign ministry spokeswoman Zhang Qiyue's response in May to a question on China's position on the Sikkim issue.

"This is a problem that has existed for a long time," she said.  "China and India would like to conduct useful and meaningful exploration on this issue."

This has been widely perceived as an indication that Beijing is willing to resolve the issue and thus give a political content to Vajpayee's visit.  Some experts believe that part of the deal may have been negotiated during Defence Minister George Fernandes' visit to China last month, though the decision to revive talks on the issue was taken during then external affairs minister Jaswant Singh's visit to Beijing in March last year.

In fact, media reports of a breakthrough on Sikkim prompted Sikkim chief minister's political adviser B B Gooroong to 'welcome this gesture by China, which indicates that it is willing to resolve the vexed question'. 

"On a note like this, we can hope the prime minister's visit to China next month will definitely lead to something positive, including revival of the Himalayan trade route between the two countries," he said.

But what exactly will the deal be? Will China agree to recognise Sikkim legally before India announces the reopening of the Nathu La pass for trade? Or will it be the other way round? What are the concessions India is willing to make to get change the wording on the foreign ministry's website?

At the moment, it's anyone's guess.