Revoking Kashmir's special status, stripping away constitutionally guaranteed privileges to land and jobs, is widely seen as Modi's most spectacular effort yet to push his Hindu nationalist agenda after a landslide election victory in May.
His government insists it will bring peace and prosperity, but the massive military reinforcement that accompanied the measure is a clear acknowledgement of the underlying risks.
While many Hindus celebrated, the Kashmir valley -- focus of a 30-year-old Muslim insurgency against Indian rule -- was smothered under one of the heaviest security clampdowns it has seen.
Tens of thousands of extra Indian troops enforced a blanket curfew on top of a total communications blackout, but reports still emerged of sporadic protests and gunfire in the streets.
A.S. Dulat, a former chief of the Indian intelligence service and government advisor on Kashmir, said keeping a lid on violence was critical if Modi was to claim victory for his dramatic power play.
"But, my own apprehension is there will be repercussions and there will be an escalation of violence," he told AFP.
Anger and alienation
D.S. Hooda, a retired lieutenant general who once commanded Indian forces in Kashmir, also voiced fears of "anger, alienation and law and order disturbances".
India already had 500,000 troops in Kashmir before the reinforcements arrived.
Militant activity, after some years of decline, reared up after the killing of charismatic rebel leader Burhan Wani in 2016, and Kashmiris say the current lockdown will only fuel a sense of growing resentment.
"People are not going to take this lying down," said Iltija Javed, daughter of former Kashmir chief minister Mehbooba Mufti who was detained at the weekend.
"It's not physically possible to keep people under captivity for the rest of their lives," Javed told AFP from Srinagar.
Modi's ruling Bharatiya Janata Party believes it is righting a historical wrong which saw outsiders -- mainly Hindus -- excluded from economic power when Kashmir was granted privileged status after independence.
But many remain uncomfortable with the manner in which that status was stripped away, using a presidential decree with no debate in Kashmir and only token discussion in the New Delhi parliament.
"The manner of its execution -- while extraordinarily efficient -- has brought deceit, disinformation and communal politics, once again, to the centre stage," South Asia counter terrorism expert Ajai Sahni told AFP.
How will Pakistan react?
Another key concern is Pakistan, whose Prime Minister Imran Khan vowed Tuesday to challenge India's "illegal" action at the UN Security Council.
The nuclear-armed rivals have already fought two wars over Kashmir, which is divided between the two countries and claimed by both.
Earlier this year they came close to war yet again, after a militant attack in Indian-held Kashmir was claimed by a group based in Pakistan, igniting tit-for-tat air strikes.
Ankit Panda, a New York-based geopolitical analyst, stressed that Kashmir was a "core" interest of the Pakistan military which dominates the country's foreign and security policy.
"So we may see Pakistan step up its attempts to raise tensions ... or Pakistan increasing its use of non-state groups to begin attacking Indian paramilitary personnel in Kashmir," Panda said,
"If the Pakistani military decides it's going to react in that way ...things start to get very dangerous."
Indian Home Minister Amit Shah, a key architect of Modi's action, compounded international concerns when he told parliament that uniting Kashmir -- including a small section under Chinese control -- was a cause worth dying for.
Sadanand Dhume, an analyst at the American Enterprise Institute in Washington, said it was still too early to say if Modi's move would be seen "as a wise decision or an historic blunder."
"But two things are clear: India has ignored Kashmiri sentiment, and taken a risky decision with almost unfathomable implications," Dhume said.