Twenty years ago, as a young foreign correspondent newly arrived in Delhi, I was sent up to Srinagar to cover the outbreak of the rebellion against India. It was the most beautiful place: looking out over the Dal lake, shikara canoes skimming across. Behind were the willows and the poplars, and the orchards of apricots and almonds. Beyond stretched the old Mughal water-gardens, and above them, the jagged snow-peaks of the great Himalaya. Yet almost from my first morning in this earthly paradise, I found myself reporting some of the most chilling atrocities I have ever witnessed.

On the morning of 21 January 1990, several thousand Kashmiris, including much of the civil service, broke the curfew and marched peacefully out of the old city to complain about incidents of police violence during search operations the previous night. When the crowd was halfway across the Gowkadal bridge, at the centre of town, the much-feared CRPF paramilitary police opened fire on the unarmed civilians, with automatic weapons, from three directions.

I went to the city hospital later that evening. Every bed was full, and the overflow lined the corridors. Farooq Ahmed, the urbane city engineer, described how after the firing, the CRPF walked slowly across the bridge, finishing off those who were lying on the ground. Ahmed had fallen flat and managed to escape unhurt. "Just as I was about to get up," he told me, "I saw soldiers coming forward, shooting anyone who was injured. Someone pointed and shouted, 'That man is alive,' and the soldiers began firing at me. I was hit four times in the back and twice in the arms." Seeing how he was still alive, another soldiers raised his gun, but the officer told him not to waste ammunition: "He will die anyway."

In his moving memoir, Basharat Peer provides the fullest account that I have read of the Gowkadal bridge massacre, among many other tragic tales. Peer grew up in Kashmir during the height of the insurgency, which has now left some 70,000 Kashmiris dead, and many more scarred and wounded. Already highly acclaimed in India, Curfewed Night is an extraordinary book, a minor masterpiece of autobiography and reportage that will surely become the classic account of the conflict.

Peer was barely 13 when the massacre took place, but with beautifully melancholic prose he evokes memories of that period and shows how the innocent rural Kashmir of his childhood turned into the brutalised battlefield of today, where Pakistan-backed guerrillas continue to fight Indian security forces in a bloody stalemate that has wrecked the region. Along with the catastrophe currently unfolding in Afghanistan, it remains one of the two proxy wars currently being fought by India and Pakistan for control of Himalayan central Asia.

Peer was born in a small village near Anantnag, later to become one of the most militant areas in the valley. His father was a civil servant, who by dint of hard work had pulled himself out of poverty and risen to marry the daughter of the village schoolteacher. The family had some land, and during the planting season and the harvest the whole family would toil in the paddy and mustard fields. No one in the village had a telephone and few had ever left the valley. Electricity was intermittent, and the wider world seemed far away, as indeed did India: Kashmir's autonomy was guaranteed by its act of accession to the Indian union, and alone among Indian states it had complete control over its internal affairs. India only had the right to police its borders.

Successive Indian governments, however, steadily increased their control and in 1953 the Kashmiri prime minister, Sheikh Abdullah, was imprisoned. The referendum, promised by Nehru at the UN, on whether the state would remain part of India, was never held, either in Indian Kashmir or the western part of the state that ended up under Pakistani control. Instead, a succession of elected Kashmiri governments were dismissed by New Delhi, and direct rule imposed. Development grants were misappropriated: four golf courses were built, but few schools and no hydroelectric dams or public sector industrial plants. Following the shameless rigging of the 1987 local elections, furious Kashmiri leaders went underground. Soon afterwards, the bombings, strikes, assassinations and stone-throwings began.

Peer tells how a series of horrific rapes and atrocities by Indian troops radicalised a population who were vaguely pro-Pakistani, but whose activism had previously never gone beyond cheering for Pakistani fast bowlers. The massacres of the early 1990s changed Kashmir for ever: militant groups sprung up in every village, initially armed with only home-made weapons, and the Kashmiri Hindu population fled the valley where their ancestors had lived for thousands of years, cohabiting peacefully with the Sufi Muslim Kashmiris for centuries. Peer returned to school in the spring to see his village schoolroom half empty: the desks of the Hindus were now vacant.

By the mid-1990s, under Benazir Bhutto, Pakistan ramped up the conflict by sending over the border thousands of ideologically hardened jihadis. Some of these were the sort of exiled Arab radicals who were at that moment forming al-Qaida in Peshawar. These foreign jihadis tried to impose a hardline Salafi-Wahhabi form of Islam on the people of the valley. Women who refused to wear the full black chador might have acid thrown in their faces.

In Peer's village, militants attacked the security forces with Kalashnikovs, and on several occasions Peer and his family had narrow escapes as army convoys were attacked around them and their house was sprayed with bullets. He describes the "crackdowns", when Indian security forces would surround a village and parade its inhabitants in front of a masked informer. Anyone fingered would be tortured.

It is Peer's descriptions of the systematic torture by India of its Kashmiri citizens that reflect most badly on the world's largest democracy. As with Israel, a democratic electoral system in India has not been enough to keep its discontented citizens – whether Muslims in Kashmir or tribal Naxals resisting Indian mining companies – from suffering systematic human rights abuse at the hands of its armed forces. In Kashmir, India responded to the insurgency by setting up two medieval torture chambers, Papa 1 and Papa 2, into which large numbers of local people, as well as the occasional captured foreign jihadi, would "disappear". Their bodies would later be found, if at all, floating down rivers, bruised, covered in cigarette burns, missing fingers or even limbs. Peer describes how many of his generation of Kashmiris were rendered impotent by one favoured torture method: inserting a copper wire up the suspect's penis and connecting it to the electricity mains.

Considering the geopolitical importance of Kashmir and its crucial role in causing three major wars between India and Pakistan, remarkably little has been written on the conflict, especially by Kashmiris themselves. In a memorable passage, Peer describes walking into a New Delhi bookshop and being overcome "with a sense of shame" that almost nothing was available in English on the struggle he had grown up with. Peer has magnificently filled this gap in a memoir that instantly marks him out as a new star of Indian non-fiction.

William Dalrymple's Nine Lives: In Search of the Sacred in Modern India (Bloomsbury) has just been awarded the first Asia House prize for literature.