Indian and Pakistani troops have traded fire along their tense border, killing four people including a teenage girl and forcing hundreds to flee their homes in the latest round of deadly clashes.

The violence on Saturday came a day after India said a Pakistani fishing crew suspected of involvement in "illicit" activities blew up their boat while trying to evade capture at the hands of the Indian navy.

Tension between the two neighbours escalated on Wednesday when an Indian border guard and two Pakistani paramilitary soldiers were killed during another exchange of fire.

The shelling intensified on Saturday, necessitating "evacuation of hundreds of people" living in the border areas of Samba and Hiranagar, said Rajesh Kumar, a senior police official in Indian-controlled Kashmir.

An Indian woman was killed and 10 others were wounded, Kumar said.

Another official said two Indian soldiers were killed as Pakistani soldiers fired rocket-propelled grenades in Tanghdar area near their de facto border, about 140km northwest of Srinagar.

Rajnath Singh, India's home minister, criticised Pakistan over Saturday's incident.

"We are stretching our hands for friendship with Pakistan but despite this we don't understand why the ceasefire is violated by Pakistan," he said.

'Befitting' response

On the Pakistani side, the military said its paramilitary forces responded "befittingly" to Indian fire, which killed a teenage girl.

"Indian BSF yet again resorted to unprovoked firing on working boundary near Sialkot today," a military statement said, referring to the Border Security Force, a paramilitary force.

The statement said "13-years-old Sumaira, resident of ... Zafarwal sector embraced martyrdom due to the firing [and] eight-year-old Mursaleen of ... Shakargarh sector got injured".

Recent exchanges of fire across the de facto border between India and Pakistan in Kashmir, which both countries administer in part but claim in full, have killed around two dozen civilians and forced thousands to flee their homes on both sides.

India and Pakistan have traded blame for the surge in shooting and shelling which started on October 6 last year.

India called off peace talks in August after Pakistan first consulted Kashmiri separatists, a move some saw as a sign of a tougher stance by Prime Minister Narendra Modi's new government.