Official figures released on Sunday said that three attackers have been killed and 11 people have been wounded in the gun battle that continued for two days.
Indian Army chief Bipin Rawat also rushed to Jammu to monitor the situation.
Hundreds of police, army and paramilitary soldiers were called in to dislodge the fighters, who had barricaded themselves inside multistorey buildings.
The vast army installation located in the city of Jammu is located close to several shopping centres and schools.
Speaking to Al Jazeera, an official from the civil administration said the nearby schools had been closed as a precautionary measure and security was beefed up across the area.
“The situation continues to be tense. The attack has taken place in the main city. The exchange of fire is still on,” the official said.
Indian Home Minister Rajnath Singh said he was closely monitoring the situation.
The attackers are suspected to be affiliated with Jaish-e-Mohammad, a Pakistan-based group which has launched similar raids in recent years against the army and paramilitary installations across the region.
Jammu is the main city in the southern part of the disputed state, claimed by both Indiaand Pakistan in full. The archrivals control parts of the Muslim-majority Himalayan region.
Cross-border firing in violation of a 2003 ceasefire agreement has gone up in the past months leading to causalities, with more than a dozen people killed on the Indian side since the beginning of this year.
The two nuclear-armed neighbours have been at loggerheads since an attack on an army camp in Kashmir’s Uri left 18 Indian soldiers dead in 2016.
New Delhi regularly accuses Islamabad of aiding fighters in crossing the de facto border (Line of Control) to attack targets inside India.
Pakistan denies the allegations and stresses that it only lends moral and diplomatic support to Kashmiris.
SOURCE: AL JAZEERA NEWS