The 1999 Kargil conflict was the last major battle between the two nuclear-armed foes, who have fought numerous wars since their partition into two nations upon independence from British colonial rule.
It came just a year after tit-for-tat atomic weapons tests by the neighbours and spurred international alarm that the confrontation risked tipping into all-out nuclear war.
Friday's ceremony marked the 25th anniversary of the conflict's end, when sustained diplomatic pressure from Washington and elsewhere forced Pakistan's withdrawal.
"Times change, seasons change, but the names of those who give their lives for the country live forever," Prime Minister Narendra Modi, who laid a wreath for India's fallen soldiers, told the crowd at a memorial for the conflict in the town of Drass.
"India was trying for peace at the time. But Pakistan once again showed its untrustable face."
Modi's speech capped two days of events showcasing India's military might at the border, with a flyover by air force jets and a choreographed performance by fire-breathing soldiers.
The high-altitude confrontation being commemorated began when Pakistan-backed militants crossed into Indian territory at Kargil, a remote outpost on the countries' shared frontier.
At least 1,000 people were killed over the following 10 weeks, but the conflict ended with no changes to the status quo along the border.
Pakistan withdrew after severe pressure from Washington, which was alarmed by intelligence reports showing Islamabad had deployed part of its nuclear arsenal nearer to the conflict.
The aftermath roiled Pakistan's establishment, with then-prime minister Nawaz Sharif blaming his army chief Pervez Musharaf for igniting the conflict without his knowledge or approval.
Months later, Musharaf overthrew Sharif in a coup in one of the Pakistani military's periodic political interventions.
India marks last Pakistan conflict at Himalayan frontier
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