India had made a lot of progress democratically in Kashmir and had actually won over a lot of Kashmiris. A lot of them either supported or tolerated Indian rule as long as their daily lives went on peacefully. With this move, they've lost all popular support they had in the valley. All pro-Indian Kashmiris I know personally are feeling betrayed and regretting that they supporting Indian rule in Kashmir.
Even elected pro-India politicians have been jailed and their voices suppressed. IMO this is going to result in people losing their belief in Indian democracy. Over the next few years, I expect number of militants in the Kashmir valley to grow rapidly. I think the valley will go back to where it was in early 90s. I hope it doesn't come to that but I don't see this playing out any other way unfortunately.
Showing military might is not the solution.