The Indian election reaches the de facto capital of Tibetans-in-exile on Wednesday as members of the community in Dharamsala are given the right to vote for the first time.

But the decision to grant voting rights to all people of Tibetan origin born in India between 1950 and 1987 has divided the exile community. While some have welcomed the move and registered to vote, many see it as a blow to more than 50 years of struggle that could diminish their chance of returning to their homeland.

Tenzin Tsundue, an exiled Tibetan poet and activist, said: "We are not immigrants, but political refugees waiting to return home. We cannot settle in exile; our rights are in Tibet, not in India. Indian citizenship may be personally beneficial, but it will leave us divided, culturally diluted and finally get us killed by complacency."

Narendar Chauhan, chief electoral officer for Himachal Pradesh, which includes Dharamsala and votes on Wednesday, said that just over 1,200 people of Tibetan origin had registered to vote, though the number in the state who applied to vote but failed to meet the conditions was three times that. Around 48,000 out of an estimated 120,000 – one-third resident in Himachal Pradesh – were made eligible to vote by the rule change.

Tibet's spiritual leader-in-exile, the 14th Dalai Lama. Photograph: Manan Vatsyayana/AFP/Getty Images

For the past 55 years, Tibetans born in India were legally recognised as foreigners and needed a permit renewed every year, or in some cases every five years. They were not allowed to own land, deprived of professional job opportunities and some even faced imprisonment for participating in anti-China protests.

The community of exiles began when India offered a haven to the Tibetan spiritual leader, the 14th Dalai Lama, after he and thousands of his followers fled after a failed uprising against Chinese rule in 1959. In recent years, there has been a growing debate within the community about whether or not Tibetans born in India should accept Indian citizenship, something to which they are entitled by birth.

In February, India's chief election body directed all Indian states to include Tibetans and their offspring born in India in the electoral rolls. This followed a 2013 court order that granted Indian citizenship to Tibetan refugees born in India after 26 January 1950 and before 1 July 1987.

"I feel good about it as I finally got to some identity from no identity – not to be confused with my Tibetan identity, which will not be affected," said Lobsang Wangyal, a 1970-born exiled Tibetan entrepreneur living in McLeod Ganj, the Tibetan-dominated suburb of Dharamsala.

But many Tibetans in India have not taken up their new right to vote and the self-proclaimed Tibetan government-in-exile, which has its own elections for Tibetans in India, has taken a neutral stance on the subject. Tashi Phuntsok of the Dharamsala-based Central Tibetan Administration said: "It is entirely up to the individual Tibetan to avail of the rights as obtained under any Indian law."

The voting rights debate also highlights the contradictions within Indian policy towards the Tibetans. India's home ministry (MHA) recently expressed its reservations on giving voting rights to Tibetans, citing important strategic and security considerations that could have a serious impact on diplomatic ties with China. The MHA has written to the foreign ministry (MEA) asking it to challenge the poll panel's order in the supreme court.

"There is often a tension between MEA and MHA over Tibetans where the former has a more accommodative approach and the latter a sceptical one," said associate professor Dibyesh Anand of the department of politics and international relations at London's Westminster University.

"Individual Tibetans have had to fight at every level through the court system to get limited rights and recognition within India and this issue is part of that struggle for recognition," he added.

Eligible first-time Tibetan voters are already debating which candidate of the two major national parties they would like to vote for. Lobsang said: "What amazes me about the Indian elections is that some 800 million voters will cast their ballots and all that unfolds is the true celebration of democracy. My vote will go to a party that embraces diversity and plurality, and fosters the secular fabric of India."