Indian Prime Minister Narendra Modi says “terrorism is on its last legs” in Indian-administered Kashmir while campaigning in the disputed territory, a day after two soldiers were killed in a gunfight with suspected rebels.

Indian-administered Kashmir has seen a rise in fighting between rebels and security forces before the region’s first local assembly polls in a decade. Voting begins next week.

The Himalayan region in India has been without an elected local government since 2019 when Modi’s Hindu nationalist government cancelled the region’s semiautonomy.

“The changes in the region in the last decade are nothing short of a dream,” Modi told thousands of supporters at a rally on Saturday in Doda, a town in the Hindu-majority southern area of Jammu.

“The stones that were picked up earlier to attack the police and the army are now being used to construct a new Jammu and Kashmir. This is a new era of progress. Terrorism is on its last leg here,” he said, referring to the region’s official name in India.

Indian army officers pay tribute to colleagues killed in Indian-administered Kashmir [Channi Anand/AP]

Modi and his Bharatiya Janata Party (BJP) say the government’s changes to the territory’s governance have brought a new era of peace and rapid economic growth.

The implementation of those changes in 2019 was accompanied by mass arrests and a months-long internet and communications blackout to forestall protests.

Many Kashmiris are resentful of the restrictions on civil liberties that followed, and the BJP is fielding candidates only for a minority of seats concentrated in Hindu-majority areas.

Modi pledged at Saturday’s rally that his party would “build a secure and prosperous” Indian-administered Kashmir “that is free of terrorism and a haven for tourists”.

But this year’s local polls, which begin on Wednesday before results are announced next month, follow a spike in gunfights between security forces and rebels.

In the past two years, more than 50 soldiers have been killed in clashes with rebels, mostly in the Jammu area.

The Indian army said another two soldiers died on Friday during a firefight in the Kishtwar region as it paid tribute to the “supreme sacrifice of the bravehearts” in a post on the social media platform X.

Muslim-majority Kashmir has been divided between rivals India and Pakistan since their independence from British rule in 1947 and is claimed in full by both countries. Rebels have fought Indian forces for decades, demanding independence or a merger with Pakistan.

About 500,000 Indian soldiers are deployed in the region, battling a 35-year rebellion that has killed tens of thousands of civilians, soldiers and rebels since 1989.

India accuses Pakistan of backing the region’s rebels and cross-border attacks inside its territory, claims Islamabad denies.

The nuclear-armed neighbours have fought several conflicts for control of the region since 1947.