By Sanjeev Miglani

NEW DELHI (Reuters) - India wants to limit tensions with Pakistan after what it said was a successful cross-border strike on militants sheltered there, according to two top officials, who sought to allay fears of a broader conflict between the nuclear-armed nations.

One of the officials, who are both part of Prime Minister Narendra Modi's government shaping a new, more robust strategy toward Pakistan, said India remained focused on rapid economic growth, and any conflict would deflect it from that path.

"War is not in India's interest at this point," the official said, speaking on condition of anonymity because relations with Pakistan remained tense after India announced the Sept. 29 strike inside the part of Kashmir controlled by Pakistan.

"We want to build comprehensive national power - economic, military and diplomatic. We need time, but if we stay on this path, the power differential with Pakistan will become so high by 2025 that you don't have to fight a war," the official said.

Modi's government, breaking with a traditional policy of military restraint, said last month it sent special forces across the militarized frontier in Kashmir to kill an unspecified number of militants in retaliation for an attack on an Indian army base.

Pakistan said it had nothing to do with the attack on the base and has denied any Indian strike took place across the Line of Control, the de facto border in Kashmir. It said it would repel any aggressive action from India.

On Friday, Pakistani Foreign Ministry spokesman Nafees Zakaria said New Delhi was trying to divert attention from a crackdown on violent protests this summer against Indian rule in its part of Muslim-majority Kashmir.

"Pakistan has already rejected the baseless claims of surgical strikes. As we emphasized earlier, India is desperate to divert attention of the international community from grave human rights violations," Zakaria told a news briefing.

More than 80 civilians have been killed and thousands wounded in the worst unrest in the disputed Himalayan region for six years. At least two police officers have died and more than 5,000 security force members have been wounded.

India has not offered any evidence for the cross-border raid in Kashmir, although military officials have said there is footage from helmet-mounted cameras on the raiding party as well as from drones.

U.S. diplomats and an intelligence official in New Delhi and Washington have confirmed there was an Indian action across the Line of Control dividing Kashmir between India and Pakistan, but details were not available.

Pakistan's military declined to comment for this article.


Soon after the army base attack which killed 19 Indian soldiers, some officials in New Delhi said the government would act with restraint towards Pakistan, with which India has fought three wars, two of them over Kashmir.

The subsequent announcement of a cross-border strike reignited fears of an escalation in tensions between the countries, but the second Indian official said they were overblown.

"There is no concern, the chapter is over," the official said referring to the raid India says it carried out. "The issue is not what India will decide; the issue is whether Pakistan can act on the basis of rationality."

India has long demanded that Pakistan act against militant groups operating from its soil, including by going after the leaders of Lashkar-e-Taiba, which it holds responsible for the 2008 attack on Mumbai that killed 166 people.

Pakistan denies giving material support to fighters in Kashmir, and says India has not provided evidence linking it to militant violence in India.

The first Indian official said the government would respond to cross-border terrorism more forcefully than previous Indian administrations, and not be cowed by fear.

"It has been a low-cost option for Pakistan; keep sending these fighters into Kashmir and pin down our army. We are going to raise the costs for them."

India has been on the back foot in Muslim-majority Kashmir for several months, after tens of thousands of people staged protests demanding freedom from Indian rule when soldiers killed a popular young militant commander in July.

Insurgents have stepped up attacks in recent weeks, although the level of violence is a fraction of its peak in the 1990s and early 2000s, when hundreds of people were killed each year.

The first government official and an army officer in Kashmir said there were an estimated 250 militants inside the Kashmir Valley, the highest number in six years, and that they expected more attacks in the coming weeks.

Reuters was not able to verify the figure, which the official and officer said was based on radio intercepts and intelligence information.

According to the officer, numbers had risen because 72 militants had infiltrated from Pakistan in the first seven months of 2016, compared with 35 for the whole of 2015.

But local Kashmiris, especially in the south where the slain insurgent commander had his base, were also taking up arms in greater numbers, the first government official said.

(Additional reporting by Douglas Busvine and Paritosh Bansal in NEW DELHI, Fayaz Bukhari in SRINAGAR, Jonathan Landay in WASHINGTON and Kay Johnson in ISLAMABAD; Editing by Mike Collett-White)