The region, which has seen tensions rise in recent days, is set to lose its special status under new government measures. Kashmir has been claimed by both India and Pakistan since partition in 1947.
India removed Kashmir's special autonomous status from its constitution with a presidential decree on Monday. It also moved a bill to divide the Indian-administered part of Kashmir into two regions directly ruled by New Delhi.
"The entire constitution will be applicable to Jammu and Kashmir state," Shah said, ending the state's rights to make its own laws.
What is Article 370?
The article is a provision in the Indian Constitution that confers special status on the state of Jammu and Kashmir. Its revocation would lead to Indians outside of the state gaining the legal right to own property there.
But critics say such changes would lead to demographic transformation and have accused the Hindu nationalist-led government of wanting to establish a Hindu majority in the predominantly Muslim region.
"This move will be challenged in the Supreme Court," Tufail Ahmad, a lawyer, told DW.
"We will fight against this bill and will not let it pass in Parliament," Derek O'Brien, a leader of the opposition Trinamool Congress party, told DW.
Such defiance is likely to be of little avail. The resolution was approved in a voice vote on Monday evening by the upper house, or Rayja Sabha, which also passed a bill paving the way for a reorganization of the state by a vote of 125 to 61.
The bill and resolution will now go to the lower house, or Lok Sabha, where the majority enjoyed by the ruling Bharatiya Janata Party will more or less ensure they are passed there as well.
Pakistan takes a dim view
Pakistan's Foreign Ministry responded to the revocation with a statement saying it "strongly condemns" India's decision and "will exercise all possible options to counter the illegal steps."
"The Indian Occupied Jammu and Kashmir is an internationally recognized disputed territory. No unilateral step by the government of India can change this. Nor will this ever be acceptable to the people of Jammu and Kashmir and Pakistan," the ministry said, citing that its status had been upheld by UN Security Council resolutions.
"Pakistan reaffirms its abiding commitment to the Kashmir cause and its political, diplomatic and moral support to the people of occupied Jammu and Kashmir for realization of their inalienable right to self-determination."
Tensions and clampdowns
Earlier on Monday, Kashmir was in a major security lockdown as Indian government forces were deployed to lay steel barricades, place razor wires on roads, and cut off intersections in Srinagar, the region's principle city. Internet services were also suspended as a way of disrupting potential protests.
"Kashmir is like a garrison," Bilal Ahmad, a shopkeeper in Srinagar, told DW. "We're not allowed to move out and all streets are filled with security personnel," he said.
"We really don't know how Kashmiris will react to this decision in the coming days and weeks," Waheed Para, a political worker, told DW. "Right now, there's a curfew-like situation and this will not go down well with the people."
A number of state leaders were placed under house arrest in a sign of rising tensions in the region after Indian officials issued an alert about possible militant attacks by Pakistan-based groups.
India's government on Friday asked tourists and Hindu pilgrims visiting a shrine in India-administered Kashmir to "curtail their stay" and return home as soon as possible amid concern over security threats.
The president of the Jammu & Kashmir Peoples Democratic Party, Mehbooba Mufti, tweeted that abolishing article 370 "will have catastrophic consequences for the subcontinent. GOIs intentions are clear. They want the territory of J&K by terrorising it’s people. India has failed Kashmir in keeping its promises."
Mufti, a former ally of Indian Prime Minister Narendra Modi's, said it was "ironic that elected representatives like us who fought for peace are under house arrest."
Indian historian and commentator Ramachandra Guha said on Twitter: "To place two former Chief Ministers under house arrest is unprecedented and unacceptable. Would it happen in any other state of India? Is this how we build trust among the Kashmiris?"
Rebels in the Indian-controlled part of Kashmir have been fighting for three decades. The majority of Kashmiris support the rebels' demand that the territory be united either under Pakistani rule or become independent, and many have participated in protests against Indian control. Since 1989, roughly 70,000 people have been killed in the course of the uprisings.
India and Pakistan have had a tense relationship ever since the British divided the subcontinent into a secular but predominantly Hindu India and a Muslim-majority state of Pakistan. The partition sparked riots and communal violence across the region and led to one of the largest migrations in history.
jsi, ls/aw (AP, Reuters, dpa, AFP)
Additional reporting by Murali Krishnan from New Delhi