Besides a package of major investments, Xi may announce the opening of the route sought by Prime Minister Narendra Modi during their first meeting in Fortaleza in Brazil in July this year.
Chinese officials say the proposal is under serious consideration.
All announcements including the quantum of investments China plans to make in India are expected to be announced during Xi's visit planned for the third week of this month.
Modi wanted the second route for the Kailash-Mansarovar Yatra, keeping in view the terrain difficulties of the existing routes through Uttarakhand and Nepal which involved arduous journey involving heavy tracking or by mules.
The Yatra involves trekking at high altitudes of up to 19,500 feet.
The Yatra being organised by External Affairs Ministry goes through Lipu Pass, Himalayan pass connecting the Kumaon region of Uttarakhand in India with the old trading town of Taklakot in Tibet. The route was badly damaged in recent floods in Uttarakhand.
Tour companies organise similar tours through Nepal which are equally tough, making it difficult for aged and not so healthy people to undertake the pilgrimage.
The journey, however, may become more comfortable if China opens Nathu La pass in Sikkim used for a limited border trade, as the pilgrims could travel by vans and busses up to Manasorvar and Kailash directly.
Officials say the opening of the post will not affect the nature of the border dispute as the clause states that it is subject to the overall agreement of the boundary and would be specified in any new MOU.
The new route, though longer, takes pilgrims from Nathu La to Shigatse also known as Xigaze, the second biggest city in Tibet after provincial Capital Lhasa by road.
From there the pilgrims could comfortably travel to Manasarovar and Kailash using well laid out highway.
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