India is to reduce its troop deployments in the disputed territory of Kashmir this winter, Prime Minister Manmohan Singh has announced.
India and Pakistan have fought two wars over Kashmir
Mr Singh said the move reflected "an improvement in the security situation" there. He did not say how big the troop reduction would be.
Pakistan has welcomed the move as "a step in the right direction".
India and Pakistan have fought two wars over Kashmir which has been divided since independence in 1947.
The two nuclear rivals are due to hold detailed talks in December on resolving the dispute.
Although Mr Singh did not give any numbers or a firm timetable of the troop reduction, the symbolism of his statement is just as important as the substance, says the BBC's Nick Bryant in Delhi.
The move is widely seen as a significant confidence-building measure ahead of the Kashmir talks, our correspondent says.
"During the past several months, the Indian army and other security forces deployed in the state of Kashmir have achieved success in bringing about an improvement in the security situation," Mr Singh's statement said.
It said that in recognition of this, "the government has decided to reduce the deployment of troops this winter".
Pakistan Foreign Ministry spokesman Masood Khan described Thursday's announcement by Delhi as a positive development.
"This step should ease tension and create a new environment for sustaining the ongoing process between India and Pakistan for resolution of all outstanding issues," Mr Khan said.
India has deployed about one million troops in the Himalayan region since 1989, when Islamic militant groups began fighting for independence.
On Thursday, Mr Singh stressed that the Indian army could not "afford to relax our vigil", alleging that militant training camps and launching bases in the Pakistani-controlled Kashmir still remained intact.
India's move comes weeks after Pakistani President Pervez Musharraf made a fresh set of proposals to solve the long-running dispute by peaceful means.
Among the options the Pakistani leader suggested were joint rule over the territory or its re-division.
General Musharraf also said Pakistan's traditional demand for a referendum was impractical while India's bid to create a permanent border between the two parts of Kashmir was unacceptable.
In response, India asked Pakistan to discuss Kashmir through official channels only, suggesting that reporters should not be first to hear new proposals.