Attackers fired at Indian police officers and freed a Pakistani militant they were taking to a hospital for a check-up in the Indian part of Kashmir, police said.
Police spokesman Ghulam Hasan Bhatt said two officers suffered bullet injuries and one of them later died in Srinagar, the main city in India-controlled Kashmir.
The gunmen escaped with the insurgent.
Several militant groups have been fighting for Kashmir’s independence from India or its merger with neighbouring Pakistan since 1989.
Anti-India sentiment runs deep among Kashmir’s mostly Muslim population, with most people supporting the rebels’ cause.