The state of Sikkim lies to the north of Bengal, adjacent to Nepal and at the border between Tibet and India (as shown in the map given below – highlighted with red line).
In 1835, the Raja of Sikkim ceded to the British territory around Darjeeling in return for an annual money grant.
Friendly relations between the British and Raja (of Sikkim) were disturbed in 1849 when a minor quarrel led Dalhousie to send troops into Sikkim whose ruler was in the end forced to cede nearly 1700 square miles of his territory to British India.
In 1860, the second clash occurred when the British were engaged by the troops of the Diwan of Sikkim.
By the peace treaty signed in 1861, Sikkim was reduced to the status of a virtual protectorate.
The Raja of Sikkim expelled the Diwan and his relations from Sikkim, agreed to pay a fine of Rs. 7,000 as well as full compensation for British losses in the war, opened his country fully to British trade, and agreed to limit the transit duty on goods exchanged between India and Tibet via Sikkim.
In 1886, fresh trouble arose when the Tibetans tried to bring Sikkim under their control with the complicity of its rulers who were pro-Tibet. But the Government of India would not let this happen.
It looked upon Sikkim as an essential buffer for the security of India's northern frontier, particularly of Darjeeling and its tea-gardens. The British, therefore, carried out military operations against the Tibetans in Sikkim during 1888.
A settlement came in 1890 with the signing of an Anglo-Chinese agreement. The treaty recognized that Sikkim was a British protectorate over whose internal administration and foreign relations, the Government of India had the right to exercise exclusive control.