The International Committee of the Red Cross sent evidence to US diplomats about widespread torture by Indian security forces in Kashmir, according to cables obtained by Wikileaks.
Visits to detention centres in the region in 2002-04 revealed cases of beatings, electric shocks, sexual abuse and other types of ill-treatment.
The organisation concluded that India condoned torture in the region.
There has been no comment from the US. The ICRC said it was investigating.
The chief minister of the state of Jammu and Kashmir, Omar Abdullah, told India's NDTV channel that the allegations related to a period before his government took power and that he did not condone torture.
SM Sohai, inspector general of police in Indian-administered Kashmir, said the reports were baseless "propaganda".
"I do not how the Red Cross could have accessed that information because, normally they would not have access to these kind of locations, so it's completely unfounded," he told the BBC.
"Torture doesn't happen... Where can it happen?"
Correspondents say the revelations will be embarrassing for Delhi, coming at a time of heightened sensitivity in Kashmir, which is divided between Indian and Pakistani control.
They were published by The Guardian newspaper in the UK, one of five publications - including the New York Times, France's Le Monde, El Pais in Spain and Germany's Der Spiegel - given access to the entire archive of the reports from US diplomats out in the field by Wikileaks.
Wikileaks website says it has obtained more than 250,000 cables passed between the US State Department and hundreds of American diplomatic outposts - but it has so far only published a small sample of those messages.
The site's founder, Julian Assange, was on Thursday freed on bail in London, where he is fighting extradition to Sweden over sex assault allegations made by two women. He denies any wrongdoing.
The torture allegations come at a time of heightened tensions in Kashmir, with massive public protests and numerous curfews in recent months.
The ICRC told diplomats they had made 177 visits to detention centres and met 1,491 detainees, a cable published in the UK Guardian newspaper said.
Ill-treatment was reported in 852 cases, the ICRC said.
A total of 171 said they were beaten and 681 subjected to one or more of six forms of torture:
- Electric shocks
- Suspension from ceiling
- Crushing of leg muscles
- Legs split 180 degrees
- Water torture
- Sexual abuse
Nonetheless the situation was "much better than it was in the 1990s", officials said.
There were no longer cases of security forces indiscriminately raiding villages and detaining their inhabitants, they added.
ICRC spokesman Alexis Heeb said the organisation was looking into the matter, but would not comment on the contents of the diplomatic correspondence as that was an internal communication between the US embassy in New Delhi and Washington.
The latest batch of documents to be released by Wikileaks is made up of diplomatic messages sent from US embassies around the world.
The website released 77,000 secret US files on the Afghan conflict in July, and 400,000 documents about the Iraq war in October.
Washington has strongly criticised Wikileaks for publishing classified diplomatic cables and military reports.