
The blast occurred on a busy main road in the town of Bijbehara, 50 kilometres (30 miles) south of Srinagar, Kashmir's summer capital.
"The driver of the car was killed when explosives he was carrying in his car went off," a police officer who declined to be named told AFP.
Several of the wounded were taken to hospital, one of whom was seriously injured, he said.
Militant groups in Muslim-majority Kashmir have fought against New Delhi's rule for more than 20 years, killing security men and civilians in the highly militarised Himalayan region.
Violence has dropped sharply in Kashmir since India and Pakistan, which each hold part of the Himalayan region but claim it in full, started a peace process in 2004.
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