India's Muslim-majority region of Kashmir was formally divided on Thursday, almost three months after losing its autonomy in a move that triggered violence and stoked tensions with arch-rival Pakistan.

The move, announced in early August when India imposed a lockdown and sent in tens of thousands of extra troops, saw Jammu and Kashmir cease to be a state and split into two new administrative territories ruled directly from New Delhi.

Speaking next to a colossal statue of independence hero Sardar Vallabhbhai Patel in his home state of Gujarat, Prime Minister Narendra Modi on Thursday hailed a "bright future" for the Himalayan region.

Local authorities in Kahsmir, meanwhile, deployed tens of thousands of government forces and issued a high alert for rebel attacks and anti-India protests.

Police and paramilitary troops in bulletproof gear patrolled the streets in the densely populated old quarters of the main city of Srinagar and other towns across the volatile Kashmir Valley.