Hundreds of thousands of troops are based in Kashmir
Indian Defence Minister AK Antony has said that about 30,000 troops have been withdrawn from Indian-administered Kashmir as rebel attacks decrease.
He said that there had already been a significant reduction over the past two years and the government was willing further to reduce forces in the future.
However, an army official said the number of soldiers deployed along the Line of Control (LoC) would not be cut.
The LoC separates Indian- and Pakistani-administered Kashmir.
Separatists in Indian-administered Kashmir said that they were sceptical about the defence minister's announcement, saying they wanted independent confirmation of the troop withdrawals.
Local police are taking on more duties previously done by the army
"We have no reason to believe troops are leaving... there is no transparency at all," Javed Mir, a former militant commander, said in Srinagar.
Mirwaiz Umer Farooq, who leads the moderate faction of an umbrella group of separatist groups, also expressed doubts.
"When were the troops withdrawn? Who saw them leaving Kashmir? This is merely an announcement," he said.
India is believed to have about 500,000 troops in the state of Jammu and Kashmir.
"We have moved out two divisions of infantry formations who were on internal security duties... and approximately the number of soldiers pulled out is 30,000 men," Indian army spokesman Col Om Singh said in Delhi.
Mr Antony warned, however, that the controversial Armed Forces Special Powers Act, which gives the military sweeping powers to detain people without an arrest warrant, will remain in force across the region.
"Without special powers, [the military] will not be able to act effectively," Mr Antony said.
But he said that he was ready for a "detailed discussion for some modifications here and there" in the law and the onus was on the armed forces to prevent its misuse.
Violence has decreased considerably in the Kashmir valley since India and Pakistan started a peace process in 2004.
But talks were suspended after the Mumbai attacks last year in which 174 people were killed, including nine gunmen.
Kashmir has been a flashpoint between India and Pakistan for more than 50 years and the scene of two of their three wars. A Muslim separatist insurgency has been waged since 1989.
India sent its troops into Kashmir's towns and villages 20 years ago to deal with a worsening insurgency, but correspondents say that their presence there remains deeply unpopular.