Militants attacked a police team in Kashmir on Friday, killing two officers and wounding one despite tight security in the disputed Muslim-majority region ahead of India's Independence Day.
A group of militants opened fire on the police team that was on duty in the Nowgam area of Srinagar city, the chief of police in Kashmir, Vijay Kumar, said.
"We had inputs that militants may carry out attack and were alert," said Kumar. "They came through a narrow lane and fired indiscriminately."
He said the militants had been identified and vowed to "neutralize them" soon. The area had been cordoned off searches were going on, he said.
The attack comes days after the first anniversary of the revocation of Kashmir's constitutional autonomy, a reform the Indian government said would promote the region's development by drawing it closer to the rest of the country, reports Reuters.
But many people in Kashmir saw the loss of special autonomy as another step in the erosion of the rights of Muslims by the Hindu-nationalist government. The government rejects that.
Kashmir has been disputed by India and neighbouring Pakistan since the end of British colonial rule in 1947. Both countries claim it in full but rule it in part.
More than 50,000 people have been killed in more than three decades of insurgency in Kashmir that India accuses Pakistan of fuelling by supporting Muslim militant groups fighting India's security forces in its part of the divided region.
Pakistan says it only offers political support to its fellow Muslims in the Himalayan region.
India celebrates Independence Day on Saturday.