The United States added the Kashmiri separatist group Hizbul Mujahideen to its blacklist of terrorist organisations on Wednesday, amidst renewed protests against Indian oppression in the region.

US authorities had already designated the group's leader, Syed Salahuddin, a “global terrorist”, but he is still able to operate in Kashmir, where his group has strong support.

The State Department designation bans US citizens and residents from dealing with the group and any assets found to belong to the Hizbul Mujahideen in areas under US jurisdiction will be frozen.

“Today's action notifies the US public and the international community that Hizbul Mujahideen is a terrorist organisation,” the department said.

“Terrorism designations expose and isolate organisations and individuals, and deny them access to the US financial system. Moreover, designations can assist the law enforcement activities of US agencies and other governments.”

The US designation comes in the week that both India and Pakistan mark 70 years of independence from the British Empire — and the start of a bitter rivalry and decades of conflict over the disputed Himalayan region of Kashmir.

Since 1989, rebel groups have fought in India-held Kashmir, demanding independence or a merger of the territory with Pakistan, and tens of thousands — mostly civilians — have been killed.

On Sunday, two Indian soldiers and three civilians were killed in a gun battle after counter-insurgency forces surrounded suspected separatists in a village just south of the city of Srinagar.