Al Jazeera's Prerna Suri, reporting from Srinagar, the capital of Kashmir, said the entire town of Leh has been washed away.
"Buildings have been extensively damaged; the airport itself has been inundated with water and has been shut down," she said.
"Communication signals have also been extensively damaged. Infrastructure is completely destroyed, so there's no real way of knowing how people there are struggling to cope."
The deluge came as neighbouring Pakistan suffered from the worst floodingin decades, killing more than 1,500 people and forcing millions from their homes.
The floods tore through parts of the town during the night, damaging houses and government buildings.
The district hospital and two buildings housing offices of the home ministry were also affected.
"Mud and water is everywhere," Kausar Makhdoomi, a Kashmiri businessman holidaying in Leh, said. "There was utter confusion and people started to panic."
A massive rescue operation was under way on Friday involving the state police, paramilitary forces and the army, according to police.
"Our priority is to restore communication links with the region, even as rescue operations carry on," Kuldeep Khoda, a state police chief, said.
Priya Joshi, a spokeswoman for the India air force, said that Leh airport, which is owned by the military but operates civilian flights, had been swamped and the runway was covered in mud.
"It should be made operational later Friday," she said, adding that helicopters were flying sorties to assess the extent of the damage, which another air force officer described as "extensive".
Five villages have been hit in the sudden downpour and flashfloods. These included Choglumsar and Shapoo.
Omar Abdullah, the chief minister while expressing grief over the tragedy, said he had directed the civil and police administration to undertake relief and rescue work on a war footing.
All flights from Delhi to Leh have been cancelled.