The camps in the remote mountains along the border will supply food, drinking water, medical care and temporary shelters, said Indian Foreign Ministry spokesman Navtej Sarna on Saturday.
They will begin operating on Tuesday, pending approval from Pakistan, which has been informed of the plan, he said.
Permitting the free flow of civilian aid-seekers across the Line of Control that divides the Indian and Pakistani portions of Kashmir is a sign of increasing trust between the long-time rivals that have fought two wars over the Himalayan region since gaining independence from Britain in 1947.
Many families were torn apart when Kashmir was divided, and Sarna said Indians would be allowed to visit relatives from the Pakistani side at the camps.
Pakistan's part of Kashmir bore the brunt of the quake, and Saturday's announcement of the camps follows a call from the Pakistani president, General Pervez Musharraf, that Kashmiris from both sides of the ceasefire line be allowed to travel across to help each other rebuild.
General Musharraf suggested open
travel across the Line of Control
In Islamabad, Pakistani Foreign Ministry spokeswoman Tasnim Aslam said that Pakistan had proposed that officials from both countries meet to discuss ways to implement Musharraf's idea, and the two sides could discuss the Indian camps then.
"We will discuss whatever steps they want to take when the two delegations meet," she said. No date has been set for the meetings, she added.
Officials hoarding aid
Rights group Human Rights Watch accused Pakistani authorities in the quake-stricken city of Muzaffarabad of hoarding tents and essential supplies instead of distributing them to victims.
Scarce tents and other relief supplies were being put in storage in Muzaffarabad by civilian authorities working under the supervision of the military, rather than handed out to needy, homeless persons, the US-based rights group said in a statement on Saturday.
Human Rights Watch said civilian administration officials in Muzaffarabad, capital of Pakistani Kashmir, told it on Wednesday that tents and other emergency supplies, which had been designated for government workers, were being stored instead.
It quoted officials present as saying this was being done so they would be able to avoid problems when senior military and civilian officials demand supplies that otherwise would not be available.
"But to our knowledge there are no civil secretariat employees distributing relief supplies and tents to earthquake affectees"
Spokesman for Pakistani federal relief commissioner
It quoted another official as saying he would be fired if he handed out the tents.
A Pakistani relief spokesman denied the allegations.
"We will look into this (HRW) report. But to our knowledge there are no civil secretariat employees distributing relief supplies and tents to earthquake affectees," a spokesman for Federal Relief Commissioner told AFP.
"There might be one or two such odd incidents, but to say that relief supplies and tents are not reaching the people in Azad Kashmir because they are being stored are not true," he said.
"Soldiers are distributing food, medicines and tents in far-flung mountainous areas, reaching there on foot or by mules so that maximum number of people could be saved," he said.
"In Pakistan-administered Kashmir, tents are the difference between life and death," said Brad Adams, Asia director at Human Rights Watch.
"It is essential for the public to know that aid is being handled in a non-arbitrary, non-discriminatory manner."
Tents were said to make the
difference between life and death
The massive earthquake on 8 October has killed more than 53,000 people and injured 75,146 in Pakistan-administered Kashmir and neighbouring northern towns, officials said.
India has said the quake killed more than 1300 people in its part of divided Kashmir.