The gunfight erupted shortly after scores of counterinsurgency police and soldiers launched an operation based on a tip that militants were present in a village in southern Pulwama district late Thursday, police said.
Five militants were killed in Friday’s incident, police said in a statement, and Inspector-General Vijay Kumar called the operation a “big success.”
Government forces have stepped up operations against anti-India rebels in the region, which is divided between India and Pakistan and both nuclear-armed rivals claim the territory in its entirety.
Suspected militants have also carried out attacks on police and in one case killed two family members of a police official.
On Wednesday, Indian police said government forces killed three suspected militants in a gunfight and recovered a rifle and two pistols.
However, family members of one of the slain men said that 17-year-old Zakir Bashir was picked up from home, killed in custody, and then presented as a militant who died fighting.
Police insisted that the teenager had joined rebel ranks “just a few days before he was eliminated.”
Last week, suspected militants barged into the home of a low-ranking police official and fatally shot him along with his wife and their daughter.
On June 22, assailants shot and killed a police intelligence officer in the region’s main city of Srinagar. Police blamed militants.
India’s military last week said it thwarted a major threat when it intercepted two drones flying over an army base in the region’s Jammu area, a day after suspected explosives-laden drones were used to attack an air base there.
Rebels have been fighting Indian rule since 1989, seeking to unite the territory, either under Pakistani rule or as an independent country.
New Delhi insists the Kashmir militancy is Pakistan-sponsored terrorism.
Pakistan denies the charge, and most Kashmiris consider it a legitimate struggle.
Tens of thousands of civilians, rebels, and government forces have been killed in the conflict.