The militants fired on the convoy transporting Indian Border Security Force (BSF) troops near the town of Udhampur, 250 kilometres south of the main city of Srinagar.
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"One BSF soldier died in the attack, at least seven were injured. The militants have been engaged by security forces and one of them was neutralised," K Rajendra, the region's director general of police, told AFP.
The attack comes a week after militants stormed a police station in neighbouring Punjab province in an 11-hour gun battle with officers that killed seven people.
India accused the militants of crossing the border from Pakistan to launch the attack, the first in Punjab in more than a decade.
The attack on the convoy also follows the deaths on Tuesday of four civilians during heavy exchanges of fire by Indian and Pakistani troops across their border in southern Kashmir.
Kashmir has been divided between India and Pakistan since the two countries won independence from Britain in 1947, but both claim the territory in its entirety.
Since 1989, several rebel groups have been fighting hundreds of thousands of Indian forces deployed in the region, for independence or a merger of the disputed territory with Pakistan.
Read: Human rights: World must help end atrocities in Indian Kashmir, says AJK premier
That fighting has left tens of thousands, mostly civilians, dead.
A meeting between Prime Minister Nawaz Sharif and his Indian counterpart Narendra Modi during a recent summit in Russia had raised hopes for an improvement in perennially difficult relations, but was swiftly followed by a flare-up in violence along the Kashmir border.
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