Navtej Sarna, the Indian external affairs ministry spokesman, told reporters on Saturday: "Any demilitarisation or any redeployment of security forces within the territory of India is a sovereign decision of the government of India, and it cannot be dictated by any foreign government."
Sarna was reacting to a suggestion from Pervez Musharraf, Pakistan's president, in an interview with Indian television channel CNN-IBN, that if India demilitarised the towns of Srinagar, Kupwara and Baramullah, he would ensure that there was no militancy there.
Both countries claim all of the Himalayan territory of Kashmir, which is divided between them by a ceasefire line.
More than a dozen Islamic rebel groups have been fighting since 1989 for Muslim-majority Kashmir's independence from mainly Hindu India, or its merger with mostly Muslim Pakistan.
The conflict has claimed more than 66,000 lives. India accuses Pakistan of training and arming the rebels, a charge Islamabad denies.
The two countries have fought three wars, two of them over Kashmir, since their independence from Britain in 1947.
Musharraf also said he was disappointed at the lack of progress in the two countries' continuing peace process, and complained that India had not responded much to his ideas for resolving the Kashmir issue, according to Press Trust of India news agency, which carried excerpts from the interview.
Musharraf's comments came before a meeting between the foreign secretaries of India and Pakistan planned for later this month and aimed at opening a third round in the peace process.
Both countries took peace initiatives in 2004 and started a dialogue to settle the Kashmir dispute, but have yet to make any significant breakthroughs.