The Indian troops are described as 'battle ready'
Army vehicles were seen on the move in Rajasthan state, which shares a 1,000 km-long border with Pakistan.
The local authorities in the city of Jodhpur conducted a blackout exercise overnight - which they said was part of civil defence training.
There were similar reports of Indian troop movements in Punjab state on Wednesday.
Tension has been high since the attack on the Indian parliament last week, in which 14 people died.
India blamed two Pakistan-based militant groups, Lashkar-e Toiba and another group, Jaish-e-Mohammad, and demanded that Islamabad close them down.
'No build-up'
The Indian Defence Ministry has played down speculation about the troop movements, describing them as routine.
However, the spokesman said that Pakistan's deployments near the border were not usual.
India had earlier said that troops deployed in the state of Punjab along its border with Pakistan was "a precautionary defensive response to similar troop movements by the Pakistan army".
Pakistan denied any such actions.
In Indian-administered Kashmir, the army said it has killed five militants trying to cross from Pakistani-controlled territory.
An army spokesman said all five were Pakistani nationals and belonged to the Lashkar-e-Toiba militant group.
US concerned
The US is seeking to defuse the tension between the two nuclear rivals and Secretary of State Colin Powell has already spoken to both countries.
Washington has also called on India to share any evidence it has that Pakistan-based militants were behind the attack .
A spokesman for the US State Department, Richard Boucher, said that any information that the Indian authorities could supply would provide a better basis for Islamabad to go after the militants.
"It's not the time for India and Pakistan to start taking action against each other," he said.
India has already rejected a Pakistani offer to jointly conduct an investigation into the attack.
Infantry formations
A BBC correspondent in the Punjab says scores of battle-ready Indian troops have been stationed on the Pakistan border.
They include some tank and mechanised infantry formations.
The head of the Indian army, General S Padmanabhan, told reporters on Wednesday Pakistan was building up its forces on its side of the border.
Earlier on Wednesday,
Indian Prime Minister Atal Behari Vajpayee said he was not looking to start a war with Pakistan, but was keeping all his options open.
The Indian Government is under pressure from hardline groups to take strong action including punitive raids on alleged militant bases inside Pakistan-administered Kashmir.
However, opposition members have warned the government against launching any action that could lead to war with Pakistan.