Yes, and you of course have chosen the first option !!
Let me educate you, my ignorant Indian friend:
The UN has no internationally agreed definition of terrorism and the reason is that some organizations (OIC, Arab League etc.) define terrorism to exclude "armed struggle for liberation" and "self-determination". The member countries (of these organisations) won't accept any definition of terrorism which may declare Palestinian Freedom Fighters as Terrorists. This Dead Lock continues to this day and the UN has not adopted
the convention on international terrorism.
So, as long as the UN does not "define" terrorism, the Kashmiri Freedom Fighters cannot be declared Terrorists .....
As far as International Law is concerned, the Statute of the International Court of Justice does recognize
the teachings of the most highly qualified publicists of the various nations as a valid source of International Law. This category may also include the work of organizations and private institutions. Opinions expressed by experts carry significant weight in International Law.
And here is what some experts on International Law have to say regarding the
Kashmiri Freedom Fighters:
(The International Commission of Jurists (ICJ) is an international human rights non-governmental organization based in Geneva. The Commission itself is a standing group of 60 eminent jurists(including senior judges, attorneys and academics) dedicated to ensuring respect for international human rights standards through the law. Commissioners are known for their experience, knowledge and fundamental commitment to human rights.)
ICJ sent a fact finding mission to Kashmir in 1995. The final report published not only challenged the accession of Kashmir to India, it went on to say "If as the ICJ mission has concluded ,
the people of Kashmir have a right for self determination, it follows that their insurgency is legitimate " ... (p.84-98)
http://www.icj.org/category/publications/reports/page/33/