The state of Jammu and Kashmir has enjoyed special privileges under a temporary provision which limits New Delhi's power to make laws for the state. It also allows Jammu and Kashmir to have its own constitution, its own flag and take decisions — except for matters related to defense and foreign affairs.
Known as Article 370, the provision had been included in the Indian constitution for decades until it was revoked in August.
Speaking to CNBC on Monday, India's minister of external affairs Subrahmanyam Jaishankar said: "This was a temporary provision done 70 years ago, and 70 years ago is a reasonable time for the definition 'temporary.'"
"The earlier provision of law actually impeded entrepreneurship, development, progress, governance in that state," Jaishankar told CNBC's Martin Soong.
Before winning this year's parliamentary elections, Prime Minister Narendra Modi's ruling Bharatiya Janata Party had argued Kashmir's special constitutional status hindered its integration with the rest of the country.
Jaishankar said Jammu and Kashmir's special status raised the cost of doing business in the state, and claimed that funds sent for its development were being misappropriated. He added the quality of governance was not good and that there was a socio-economic misalignment with the rest of the country. Revoking Article 370 was "done with the intent of better governance, more development of creating a new paradigm in Kashmir and we think it will work," Jaishankar said.
India has long accused Pakistan of supporting cross-border terrorism carried out in Jammu and Kashmir and elsewhere in the country — a charge that Islamabad denies.
"The sense of being separate from the rest of India — that was taken advantage of to actually create both a separatist political movement as well as to, by our neighbor, undertake a very nasty unrelenting effort at cross-border terrorism," Jaishankar claimed, referring to Pakistan.
Jammu and Kashmir is India's only Muslim-majority state. It includes the disputed Kashmir region, which both India and Pakistan lay claim to but control only parts of.
Within the India-controlled region of Kashmir, an insurgency began in the late 1980s when some fought to join Pakistan and some fought for independence.
The nuclear-armed rivals have fought multiple wars over the contested area. Most recently, both sides carried out air strikes in each other's territory after a terrorist attack in India-controlled Kashmir killed more than 40 security officers in February.
In response to India's move in August, Pakistan suspended trade ties and expelled the Indian high commissioner to Islamabad. Pakistani Prime Minister Imran Khan has since worked to draw global attention to Kashmir and win the support of allies, including those in Washington and Beijing.
Prior to revoking Jammu and Kashmir's special status, India deployed tens of thousands of troops across the Kashmir Valley. Authorities banned public movements, shut down schools and colleges, suspended phone and internet services and detained hundreds of local politicians.
Reports said Indian security forces had kept a tight lid on protests and some deaths were reported.
Jaishankar rejected claims by critics that India's approach to Jammu and Kashmir was heavy-handed.
"If you're in charge of the security and lives of people, I think it looks prudent," he said about the steps India took in anticipation of a backlash.
"I have potentially a sensitive situation here. I've got to make sure you don't have inflamed passions and people coming on the streets and doing things, which may end up harming them," Jaishankar said, adding, "I would rather have internet restrictions on a temporary basis than loss of life on a permanent basis. That's my choice."
On Sunday, India imposed curfews in several parts of Jammu and Kashmir after reports said there were clashes between security forces and Shi'ite Muslims taking part in a procession.
Jaishankar reiterated India's long-standing policy on Kashmir and Pakistan: That a mediation between the two countries will only be done bilaterally, without any third-party intervention.
— Reuters contributed to this report.