Indian police and paramilitary forces imposed a lockdown on Srinagar, Kashmir's capital, after two days of violent anti-poll protests and placed key separatist leaders under house arrest.
A good showing in Kashmir would deal a blow to separatist groups who have called for a poll boycott to reinforce opposition to Indian rule in the Muslim-majority region.
"I am voting for development. Separatists need to de-link elections from the struggle for freedom," Iqbal Dar, a Kashmiri businessman, said.
But the boycott appeared to have an effect with election officials reporting a low turnout after polling stations closed.
At least two million security personnel are being deployed over the five-phase vote.
There were many more voters out in Mumbai, the scene of an armed attack in November which left at least 170 people dead, including nine gunmen.
Voting takes place in the 543 constituencies in five phases from April 16 to May 13. Results will be announced on May 16.
Phase I held on 16 April
Phase II held on 22-23 April
30 April: Bihar, Karnataka, Madhya Pradesh, Maharashtra, Uttar Pradesh, West Bengal, Jammu and Kashmir, Gujarat, Sikkim, Dadar and Nagar Haveli, Daman and Diu
Total constituencies: 107
7 May: Bihar, Haryana, Jammu and Kashmir, Punjab, Rajasthan, Uttar Pradesh, West Bengal, Delhi
Total constituencies: 85
13 May: Himachal Pradesh, Jammu and Kashmir, Punjab, Tamil Nadu, West Bengal, Uttarakhand, Chandigarh, Pondicherry, Uttar Pradesh
Total constituencies: 86
"Security is the only issue. It's the only reason people are stepping out to vote, especially in this area. We have seen it, we have felt it and we know all about it," Chintan Sakariya told the AFP news agency after voting in south Mumbai.
However, national security is not a priority issue everywhere, with the majority of India's 714 million voters likely to cast their ballots on local issues or according to their caste and religion.
Results of the marathon election, which will use more than 1.3 million electronic voting machines in 828,804 polling stations, are expected on May 16 but no party is expected to win a clear majority.
More than 145 million people were eligible to vote in phrase three of the five-stage election which is widely expected to result in a coalition government that will have to steer the country through an economic slump.
Voters in the states of Bihar, Gujarat, Jammu and Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Sikkim, Uttar Pradesh and West Bengal cast ballots on Thursday.
Voting was also held in the federally-administered territories of Daman and Diu, and Dadra and Nagar Haveli.
The first round on April 16 was marred by Maoist attacks in eastern and central India which killed at least 17 people.
There were scattered reports of violence during the second phase on April 23.
Votes will be counted on May 16 and the new parliament has to be constituted by June 2.
With plenty of support going to local and regional parties, it is unlikely the incumbent Congress-led alliance or the bloc led by the BJP will secure an absolute majority.
If no group wins a clear majority, the smaller regional parties could play a crucial role.
Who actually ends up governing India's 1.1 billion population will be decided in what analysts are calling the election's "sixth phase" - a period of intense political bargaining that will follow the expected fractured result.