A suspended policeman entered the VIP enclosure and flung a shoe at Jammu and Kashmir Chief Minister Omar Abdullah at an Independence Day function at Srinagar's Bakshi Stadium on Sunday.
Fifteen policemen, including four officers, have been suspended for the breach of security.
The brown leather shoe missed Abdullah, who had just risen to unfurl the national tricolour.
Responding lightly to the attack, Abdullah said: "It is better to hurl shoes and raise slogans than pelt stones." See cartoon
Abdullah thus joined a select group of world leaders — including former US president George Bush, Chinese premier Wen Jaibao, Pakistani president Asif Zardari and Indian Home Minister P Chidambaram — all of whom have had shoes hurled at them.
In his speech after the incident, Abdullah appealed for an end to violence, adding that he "will not shy away from discussing solutions (to resolve the Kashmir issue), including azaadi (freedom)".
The shoe-thrower, identified as Abdul Ahad Jan, a suspended head constable, was quickly overpowered by security officials and taken into custody.
Jan, who was suspended in May and has a pending criminal case against him, has a history of being "mentally disturbed", a police spokesperson said.
On being interrogated, Jan told the police he used a politician's pass to enter the VIP enclosure.
Jan, who waved a black flag and shouted "we want freedom" before he was whisked away, hails from Bandipora, 40 km northeast of Srinagar.
Fifty-seven people have been killed, mostly in firing by security forces, in the current phase of unrest in the Valley since June 11.