The government in the Indian state of Jammu and Kashmir has given formal approval to a rehabilitation policy for militants.
It is the first time that that such a policy has been introduced for militants who have allegedly trained in Pakistani-administered Kashmir.
The state government says militants must "eschew arms and violence" if they want to take advantage of the scheme.
They must also "accept the integrity of India" and its constitution.
There has been no reaction from Pakistan or the government of Pakistani-administered Kashmir to the announcement.
Thousands of people have joined the Kashmir insurgency since it began 20 years ago.
Officials say the new scheme is different from previous initiatives because it is specifically targeted towards militants who have been or who are based in Pakistan.
It is geared towards those who have crossed from Indian-administered Kashmir into Pakistani-administered Kashmir to get arms training so that they can join militant groups fighting Indian rule in Jammu and Kashmir.
The scheme currently in place - launched in 2004 - offers rehabilitation and monetary incentives only for "local militants".
"The new scheme is only open for those who are willing to [solemnly renounce] violence and the gun," a senior cabinet minister told the BBC.
He added that the process of screening such people would be "very strict" and would involve various security and intelligence agencies.
"We have to be sure that only genuine people make use of [it]," the minister said.
There is no exact estimate provided by India as to how many people are currently receiving training on the Pakistani side, but security agencies reckon it is about 3,000 people.
Pakistan has consistently denied that it provides any assistance to militants fighting in Indian-administered Kashmir.
Indian Home Minister Mr P Chidambram has backed the idea, but the opposition Bharatiya Janata Party (BJP) said it was a "dangerous step and a big security risk" which they would "fight tooth and nail".