India stripped Kashmir of its special status in the constitution on Monday and brought the region under its direct rule, angering Pakistan which has a competing claim to the Muslim-majority state.
Pakistan responded by downgrading its diplomatic ties with India Wednesday, announcing that it would expel the Indian envoy and suspend trade as the row between the neighbours deepened.
The countries have fought two wars over Kashmir.;"The recent developments pertaining to Article 370 are entirely the internal affair of India," the Ministry of External Affairs said in a statement.
"Seeking to interfere in that jurisdiction by invoking an alarmist vision of the region will never succeed."
New Delhi slammed Pakistan's actions as "alarmist", adding that its move would boost economic development in the Himalayan region.
The diplomatic spat came as media reports said more than 500 people were rounded up in the latest crackdown in Indian Kashmir, which is under a strict curfew to suppress any unrest in response to the loss of autonomy.
University professors, business leaders and activists were among the 560 people taken to makeshift detention centres -- some during midnight raids -- in the cities of Srinagar, Baramulla and Gurez, the Press Trust of India and the Indian Express reported.
The detentions came as Prime Minister Narendra Modi was set to address the nation on the radio later Thursday to explain his Hindu nationalist government's decision.
Tens of thousands of Indian troops are enforcing the lockdown which includes no internet or phone services, and are allowing only limited movement on streets usually bustling with tourists flocking to the picturesque valley.
Experts warn that the valley is likely to erupt in anger at the government's shock unilateral move once the restrictions are lifted, which could come as soon as the Muslim festival of Eid on Monday.
Late Wednesday India's aviation security agency advised airports across the country to step up security as "civil security has emerged as a soft target for terrorist attacks" on the back of the Kashmir move.