India's government has said it plans to revoke the part of the constitution that gives Indian-administered Kashmir special privileges.
Article 370, which grants it significant autonomy, is sensitive because it is the basis on which the princely state of Kashmir joined India when it was partitioned in 1947.
But the entire region is disputed between India and Pakistan who claim it in full but only control parts of it.
The move is expected to spark unrest.
There has been an insurgency against the authorities in Indian-administered Kashmir for three decades, with tens of thousands of lives lost.
India and Pakistan, both nuclear powers, have fought two wars and a limited conflict over the Himalayan territory.
Home Minister Amit Shah introduced the measure in parliament amid massive protests from the opposition.
Article 370 allows the Indian state of Jammu and Kashmir its own constitution, a separate flag and independence over all matters except foreign affairs, defence and communications.
The former chief minister of the state, Mehbooba Mufti, said the move effectively made India an occupying force.
The announcement in parliament came hours after two of the state's former chief ministers, including Ms Mufti, were placed under house arrest.
Public meetings have been banned in the state, with mobile networks and the internet also restricted.
In recent days thousands of tourists as well as pilgrims on an annual trek to a major shrine have been asked to leave the state immediately amid the deployment of tens of thousands of troops.