The New York-based Human Rights Watch organisation said on Tuesday in its report on the conflict that both sides had violated international humanitarian law.
"Security forces claim they are fighting to protect Kashmiris from militants and Islamist extremists while militants claim they are fighting for Kashmiri independence and to defend Muslim Kashmiris from a murderous Indian Army," the report said.
However, in reality Indian security forces have "committed torture, disappearances and arbitrary detentions" along with executions in faked "encounter killings", in which security forces claimed that the deaths had taken place in armed clashes, the report said.
The organisation also said that separatist fighters had carried out bombings and grenade attacks, targeted killings, torture and attacks upon religious and ethnic minorities and criticised Pakistan for failing to rein in the violence.
"The Indian government has effectively given its forces free rein, while Pakistan and armed militant groups have failed to hold militants accountable for the atrocities they have committed," the report said.
The report also said that the insurgency had visibly mutated into a far more dangerous fight "under the banner of religion", in which Islam was being pitted against Hinduism and in which religious radicals were being drawn.
Abuses 'not punished'
Brad Adams, Asia head of Human Rights Watch, said it was Kashmiri civilians who were bearing the brunt of the conflict and urged the Indian government to act.
"Kashmiris continue to live in constant fear, because perpetrators of abuses are not punished," he said.
"Unless the Indian authorities address the human rights crisis in [Indian controlled] Jammu and Kashmir, a political settlement... will remain illusory."
Adams called upon India to repeal tough counter-insurgency laws calling them "unacceptable''. The laws, put in place when the conflict began 17 years ago, permit the armed forces to shoot any suspect, raid any building and detain anyone for two years without trial.
The disputed region of Kashmir has been in the grip of a bloody insurgency against Indian rule since 1989 which has claimed at least 44,000 lives.