Passing through towering pine forests, the cable car rises to the top of a 13,400 ft (4000 metres) mountain in the resort of Gulmarg, just a few miles from a ceasefire line between India and Pakistan.
Residents see the long-delayed $3 million project as a symbol of hope in the disputed region, which has been the cause of two wars between the neighbours.
"Things are improving in Kashmir and tourists are flocking," Mufti Mohammad Sayed, chief minister of Jammu and Kashmir, said after inaugurating the cable car on Saturday, about 40km east of the state's summer capital, Srinagar.
"This will usher a new era of international tourism in Kashmir," he said.
Kashmir, which is considered one of the world's most beautiful places, used to attract about two million tourists a year.
Gulmarg is considered a perfect
ski resort in winter
But the number of visitors fell to less than 1% of that in the early 1990s after the eruption of a Muslim separatist revolt against Indian rule. More than 45,000 people have been killed in fighting since 1989.
Gulmarg has also the world's highest green golf course, and its grassy slopes blossom with wild flowers in summer, turning into a perfect ski resort in winter when it receives heavy snowfalls for weeks.
"The ropeway stretching 2.5km will connect the bowl-shaped Kongdoori valley with the Afarwat peak," said Farukh Ahmed, head of the Cable Car Cooperation, one of the state government's few profit-making enterprises.
French and Indian engineers have been working in huge drifts of snow to erect towers and lay cables in the area.
Farukh is convinced skiers and tourists will be more than willing to pay the $3 fee for a round-trip on the Afarwat cable car.
Until now skiers on Afarwat, from January until May, had to be dropped by helicopter - an expensive option.
The work on the cable car itself had been delayed for more than eight years after it was abandoned in 1990 by French technicians when Muslim fighters opposed to Indian rule in the disputed state briefly abducted two engineers.
"This will usher a new era of international tourism in Kashmir"
Mufti Mohammad Sayed,
Kashmir Chief Minister
Gulmarg, which the state promotes as one of its top tourism destinations, has remained safer than other parts of Kashmir.
It is a beautiful saucer-shaped valley girdled with poplars, trails lead out of here in several directions and are popular with those enjoying pony-rides.
Recently, Gulmarg received four to 10 feet snowfall covering the rolling grassy banks with a vast thick white carpet.
Aljazeera.net's Yusuf Jameel in Srinagar contributed to this report