Prime Minister Narendra Modi pledged Rs 800 billion ($12.10 billion) in funds to bolster development and economic growth in Kashmir, a year after the worst flooding in more than a century destroyed half a million homes there.
Addressing several thousand people in a cricket stadium in the northern state's capital of Srinagar, Modi said he wanted to go beyond helping flood victims.
He promised to create jobs for Kashmiri youth by improving education and promoting industries, including tourism and cashmere wool. "The biggest task at hand here is to find work for the youth of Kashmir and Ladakh ... our youth should get the cheapest and the best education, and of global standards," he said.
Ladakh is another mountainous region in the north. Saturday's visit is Modi's first this year to the disputed territory which has been plagued by militant violence for years. Nuclear-armed rivals India and Pakistan both claim Kashmir in full but rule it in part.
Violence in India's only Muslim-majority region has eased significantly from levels in the 1990s, when armed revolt against Indian rule erupted. Kashmiris have been protesting against a lack of central aid for last year's floods that the state government estimates caused $16 billion of damage.
Security forces in Kashmir detained nearly 400 separatists on Friday to prevent them from holding an anti-government protest march during Modi's visit.
Hours before Modi's rally, in footage screened on national television, police detained an independent parliamentarian, Engineer Rashid, for protesting with black flags. Security was tight with paramilitary forces and sharpshooters deployed, while schools and colleges were shut.
Internet services were suspended hours before Modi arrived. In his 40-minute speech, Modi highlighted progress, promising improved road and rail networks, as well as branches of India's prestigious management and technology institutes.
"Kashmir has suffered a lot ... the dreams of several generations have been shattered, but I have the confidence that my Kashmir will rise again," he said.
Comparing the devastation from the floods to that in his home state of Gujarat after an earthquake in 2001, Modi said: "thousands died ... homes were destroyed ... nobody believed we would be able to rebuild so quickly." India accuses Pakistan of backing the separatist militants fighting security forces in Indian Kashmir. Pakistan denies that saying it only offers diplomatic support to Kashmir's suppressed Muslims.
