Tuesday's attack is seen as a setback to what Indian Prime Minister Narendra Modi and his Hindu nationalist Bharatiya Janata Party have projected as a major achievement in revoking the special status Jammu and Kashmir enjoyed and bringing peace and development to the long-troubled Muslim-majority region.

India announced a raft of measures to downgrade its ties with Pakistan on Wednesday, a day after suspected militants killed 26 men at a tourist destination in Kashmir in the worst attack on civilians in the country in nearly two decades.

Twenty-six men were killed and 17 were injured when suspected militants opened fire at tourists in India's Jammu and Kashmir territory, police said.