Blasts rang out across the city of Jammu in Indian Kashmir late on Thursday during what Indian military sources said they suspected was a Pakistani drone attack on the second day of clashes between the two neighbours.
Several parts of Jammu and the surrounding towns of Akhnoor, Samba and Kathua came under attack, according to Indian officials.
There was no immediate comment from Pakistan on what appeared to be an escalation in the countries' worst confrontation in more than two decades.
Pakistan’s Defence Minister, Khawaja Muhammad Asif, had earlier said further retaliation was “increasingly certain” after both countries accused each other of launching drone attacks.
India said it hit nine "terrorist infrastructure" sites in Pakistan on Wednesday in retaliation for what it says was a deadly Pakistan-backed attack in Jammu and Kashmir on April 22.
Pakistan says it was not involved and denied that any of the sites hit by India were militant bases. It said it shot down five Indian aircraft on Wednesday, a report the Indian embassy in Beijing dismissed as "misinformation".
Pakistan said earlier on Thursday it shot down 25 drones from India overnight, while India said its air defences had stopped Pakistani drone and missile attacks on military targets.
World powers from the US to Russia and China have called for calm.
The Strait of Hormuz remains open to all shipping except vessels linked to "Iran's enemies", Iran's representative to the UN maritime agency was quoted as saying in Iranian media reports published on Sunday.
The Gulf Cooperation Council (GCC) has renewed its condemnation of continued Iranian attacks on member states, including the targeting of infrastructure and oil facilities, in flagrant violation of international law and a direct threat to regional security, stability and the safety of global energy supplies.
The Qatar Ministry of Interior has confirmed six people died during a helicopter crash into "regional waters" on Sunday - with search and rescue teams still searching for the body of the seventh and final crew member.
Japan could consider deploying its military for minesweeping in the Strait of Hormuz, a vital artery for global oil supplies, if a ceasefire is reached in the U.S.-Israeli war on Iran, Foreign Minister Toshimitsu Motegi said on Sunday.