A simmering land dispute has polarised Kashmir, split between the Muslim-majority Kashmir valley and the Hindu-dominated region around Jammu city, severely curbing trade between the two areas.
Here are some facts on the region, which has been a flashpoint for the two nuclear-armed powers for more than 60 years.
Geography: Bounded by Pakistan to the west, Afghanistan to the northwest, China to the northeast, and India to the south, the mountainous region backs onto the western Himalayas.
Population: 10 million in Kashmir and over three million in Pakistani Kashmir. About 70 per cent are Muslims and the rest Hindus, Sikhs and Buddhists.
Area: 222,236 square km (85,783 sq miles), slightly bigger than the US state of Utah and almost as big as Britain. India controls 45 per cent, in the south and east, Pakistan about a third in the north and west, and China the rest.
History: After partition of the subcontinent in 1947, Kashmir was expected to go to Pakistan, as other Muslim majority regions did. Its Hindu ruler wanted to stay independent but, faced with an invasion by Muslim tribesmen from Pakistan, hastily acceded to India in October 1947 in return for help against the invaders.
Wars: The dispute over the former princely state sparked the first two of three wars between India and Pakistan after independence from Britain in 1947.
Divisions: A UN-monitored ceasefire line agreed in 1972, called the Line of Control (LOC), splits the region into two areas, one administered by India, one by Pakistan.
Unrest: India and Pakistan became nuclear-armed in 1998, making Kashmir one of the world's most dangerous flashpoints.
In 1999 the two were involved in a battle along the LOC that some analysts called an undeclared war.
Their forces exchanged gunfire over a ceasefire line for years until a truce in late 2003 paved the way for peace talks.
Indian Kashmir: Governed as the northernmost state of Jammu and Kashmir. It has two capitals, Jammu in winter (November-April), Srinagar in summer (May-October).
New Delhi claims the whole of Jammu and Kashmir as an integral part of India because the Hindu maharaja finally agreed to join India in October 1947.
Pakistani Kashmir: Consists of the smaller Azad Kashmir ("Free Kashmir"), which has its own president and legislature, and the Northern Areas, which also formed part of the state before independence and is administered directly from Islamabad.
Islamabad says a UN-mandated referendum should take place to settle the region's disputes, expecting that the majority would decide to join Pakistan.
China: Controls a third section, the remote Aksai Chin plateau, historically part of Ladakh. India fought a border war over Aksai Chin with China in 1962, after China occupied a 38,000 square km chunk of territory.
Economy: About 80 per cent agriculture-based. Crops include rice, maize, apples, saffron. The area is also known for handicrafts such as carpets, woodcarving, woollens and silk. Tourism, once flourishing, has been badly hit by the conflict.