The IOC banned the country after refusing to recognise the results of Indian Olympic Association (IOA) elections held on December 5 due to government interference, which led to a tainted official being named its new secretary general.
The IOC offered a lifeline in January, inviting stakeholders to a meeting at its Lausanne headquarters to discuss ways of getting India back on track, but that meeting has already been postponed twice.
The IOA and sports ministry blame each other for failing to arrive at a consensus over the controversial code, which would restrict age and term limits for sports administrators.
In a letter to the IOC last week, V.K. Malhotra, acting chief of India's Olympic association and head of the country's archery association, accused the sports ministry of railroading national federations into accepting the sports bill.
The government says the sports code is aimed at encouraging fair and transparent governance.
"We appreciate your concern for an early solution to the problem but we are rather constrained to say that Ministry of Sports ... is bent on destroying the autonomy of the IOA and the National Sports Federations," Malhotra wrote in the letter seen by Reuters. "The same is not acceptable to us.
"While we endorsed your move for a dialogue involving the government, it has gone ahead and constituted a committee to re-draft the controversial sports bill, which is in total breach of the Olympic charter."
The IOC encourages a free hand in the running of National Olympic Committees and has banned countries from the movement due to government interference.
The IOA's long history of corruption and controversy almost made government interference inevitable.
IOA chief Suresh Kalmadi was arrested in 2011 and released from prison on bail after nine months on charges of inflating tenders worth millions of dollars for equipment used at the 2010 New Delhi Commonwealth Games which he was heading.
Kalmadi's aide Lalit Bhanot, who also spent 11 months in custody and is on bail pending further investigations, won a senior IOA post during the December elections despite the IOC deeming it "null and void".
Among other clauses, the government sports code would bar officials from holding key positions after the age of 70. That clause has met with resistance from the 81-year-old Malhotra, who has led the Archery Association of India for four decades.
In a letter addressed to IOC President Jacques Rogge, Clean Sports India, a movement for corruption-free sports in the country, accused Malhotra of delaying the process of getting the ban rescinded due to his "vested interest".
A top-level source told Reuters that 53 of 55 national sports federations (NSF) had agreed to the code and it was Malhotra and IOC member Randhir Singh who were resisting it, thus delaying India's return to the Olympic family.
"They have vested interests. If we leave out cricket, Malhotra's archery is the only NSF objecting to the sports code. He knows he becomes ineligible," the source close to the negotiations told Reuters.
"Randhir Singh has antagonised enough NSFs and knows he will lose the elections when they are held.
"But we are hopeful that this mess will be cleared by the middle of May."
The IOC had given enough indications that it had no issues with the sports code and it just wanted the clauses to be incorporated into the IOA constitution, the source added.
For their part, the IOC is keeping a close eye on the developments.
"The IOC is in contact with all parties and are hopeful discussions will take place in due course," the IOC told Reuters in an email.