I think you mean Jammu and Kashmir. Calling it Kashmir is like calling Britain England - it totally sidelines a large number of people.
Also, it can't be broken up into Hindu and Muslim areas, as Ladakh is Buddhist-majority. Presumably Ladakh is given to India here.
Anyways, if this is the case, I expect much better relations between India and Pakistan - something much more similar to India and Bangladesh rather than OTL's frigid relationship.