The Indian army and security chiefs have "total operational freedom to decide fully on the situation, target, and timing of our response to the terrorist attack", Modi announced at a security meeting on Tuesday, according to a government source.
Defense Minister Rajnath Singh was also present at the meeting.
Indian authorities have simultaneously closed 48 of 87 tourist resorts in the beautiful mountain region following the attack, as a precautionary security measure. It is unclear when they will reopen, according to some officials who wish to remain anonymous.
Last week, 26 people were killed by armed men in an attack near the popular tourist resort of Pahalgam in Indian Kashmir.
Some tourists who survived the attack have described how the perpetrators selected Hindus and shot them at close range. Among the victims are a Nepalese citizen and a local Muslim horse tour organizer.
India accuses Pakistan of supporting "cross-border terrorism". Pakistan denies involvement in the attack, but the relationship between the countries is at an all-time low. There has been repeated exchange of fire between the countries at the border in Kashmir in recent days.
Guterres calls for calm
India's Modi has vowed to pursue those responsible for the attack to "the end of the world", Pakistani citizens have been expelled, and an important border crossing has been closed.
UN Secretary-General António Guterres has been in contact with both countries on Tuesday and urged them to tone down their rhetoric and withdraw their soldiers.
The conflict in Kashmir has been ongoing for decades. The territory has been divided between India and Pakistan since the countries gained independence from the United Kingdom in 1947, but both countries claim sovereignty over the entire region of Kashmir.
