Two migrant labourers were attacked in Kashmir's main city of Srinagar and nearby Pulwama by armed insurgents, and both later died of their injuries, police said.
"Search operations are in progress," Kashmir police said in a tweet.
The killings were the latest in a wave of violence against civilians, including members of the minority Hindu and Sikh community, in the Muslim-majority Kashmir valley, which has triggered a widespread crackdown by security forces.
In a statement on Saturday, Kashmir valley's police force said that it had killed three of five suspected militants behind a spate of killings of civilians in Srinagar.
Claimed in full by India and Pakistan but ruled only in parts by both countries, Kashmir has been the site of a bloody armed insurrection against New Delhi for decades.
India says Pakistan supports the insurgency in Kashmir. Islamabad denies the charge, saying it only provides diplomatic and moral backing to the Kashmiri people.