Officials in New Delhi have warned against expecting any major breakthroughs at the two-day talks between the foreign secretaries which begin on Sunday at Hyderabad House in New Delhi.
This will the first time since 1997 that India and Pakistan will actually discuss Kashmir at any forum.
The closest the two sides came to it was in March 1997, when the then foreign secretaries Salman Haider and Shamshad Ahmed met in Islamabad to discuss a range of issues, including Kashmir.
The 1997 composite dialogue formulation envisaged foreign secretary-level talks on two subjects, Kashmir and peace and security. The other six issues to be discussed at the secretary-level included Siachen, Wullar Barrage, Sir Creek, trade, people-to-people contact, terrorism and drugs.
But the talks ended inconclusively, with India speaking of terrorism in Kashmir, and Pakistan describing it as a human rights issue.
Haider returned to India and asserted that if anything was to be discussed it will be "Pakistan-held" Kashmir and the northern areas illegally annexed by Pakistan.
This time, officials said the two sides are more likely to exchange pleasantries and discuss confidence-building measures rather than any radical moves on Kashmir.
The fact that the two sides are talking is in itself "a kind of a breakthrough," said an official.
The confidence-building measures are likely to include plans to reduce Indian troops in Kashmir and ways to step up cross-border exchanges to allow families to visit each other. Ways to resolve the impasse over the proposed Muzafarrabad-Srinagar bus route are also likely, though it is unlikely to be finalised just yet.
The Pakistan delegation, led by Foreign Secretary Riaz Khokhar, includes foreign ministry officials like Director-General, South Asia Jalil Abbas Jilani; Foreign Office spokesman Masood Khan; Additional Secretary, Asia Pacific Salman Bashir; and Director Foreign Secretary's Office Tehmina Janjua among others.
During their trip to Delhi, they are also likely to meet National Security Adviser J N Dixit and other senior government officials.
The Indian side will be led by Foreign Secretary Shashank, his successor-designate Shyam Saran, and senior officials from the Pakistan desk.
What are the issues at stake?
"There are two different definitions of the issues at stake," says Dr Ashutosh Misra, a research fellow at the Institute for Defence Studies and Analyses, a premier New Delhi think tank.
"Pakistan wants negotiations from LoC eastwards. Our contention, also talk of PoK, which they illegally occupied in 1948. We say Kashmir is an integral part of India. They talk of 1948 UN resolution," he said.
"We believe in stopping terror, as this would create an ambience to further negotiate processes with the Hurriyat etc. Pakistan doesn't want that so frankly, there is no common meeting ground."
According to Misra, Musharraf's announcement in Rawalpindi that Pakistan was willing to back off from demand for action under the UN resolutions was not really a concession.
"He has to, because Chapter 6, under which these resolutions were passed, says such resolutions are non-binding, and are only recommendations.
"Kofi Annan said as much in March 2001, when he visited India and Pakistan, saying comparing resolutions on Kashmir with those on East Timor and Iraq was like comparing apples and oranges, since those resolutions were passed under chapter seven, which make it enforceable by the Security Council," said Misra.
"However, the two things that have changed are that India has agreed to put Kashmir on the table, while for India, the Pakistan decision not to bring up the state UN resolutions is seen as a step forward.
The discussions on Kashmir are likely to be at the home secretary-level at a later date, where India is likely to stress on Musharraf's January 6 promise to not let any part of Pakistan be used for terrorist activities, said an official. Terrorist infiltration from Pakistan into India has increased in May, though not significantly," he said.
"So there might be a few more confidence building measures on peace and security, but since this is the first meeting, I suspect both sides will reiterate their positions for the record," he said.
"As far as Pakistan is concerned, they cannot sell a dialogue to the people if it excludes Kashmir. So we agreed to a composite dialogue which includes Kashmir," However, "Kashmir by itself is unlikely to be discussed, since we are yet to arrive at any common ground," he said.
"Pakistan wants to include 'the people of Kashmir' in the talks at some stage, but we differ over who really represents the real Kashmiri people and their locus-standi in the talks," he said.
"Pakistan has probably realised that violence by itself is not going to resolve the issue. They tried that in 1965, in 1971, and in Kargil, but failed. Years of militancy have also not achieved the results they wanted, and the elections of 2002 really rattled them, because international observers agreed that they were free and fair," he said.
India's negotiating position was that the entire Jammu and Kashmir was Indian territory, but the fact is, "we are not really interested in the northern territories like Gilgit and Baltistan," he added.
So what should one expect from these talks?
"Well, the least we can expect is an agreed minimum course of action, which will possibly involve further interactions at the official and non-official (track II) levels, and series of further confidence-building measures. Beyond that, only time will tell," he said.