In a damning new report, the group also called for an "independent and impartial" inquiry into cases of abuse.
The law, AFSPA, was introduced in the region in 1990 as a response to violence by insurgent groups.
But it has contributed to increasing people's alienation, the report says.
Tens of thousands of security forces are deployed in Indian-administered Kashmir to fight the militancy which began in the late 1980s. AFSPA - the Armed Forces Special Powers Act - allows troops to shoot to kill suspected militants or arrest them without a warrant.
Amnesty says these sweeping powers have led to a cycle of impunity for human rights violations in the troubled region.
The report says not a single member of the armed forces has been tried in a civilian court for violating human rights in Kashmir.
"This lack of accountability has in turn facilitated other serious abuses," says Minar Pimple, the group's senior director of global operations.
"By not addressing human rights violations committed by security force personnel in the name of national security, India has not only failed to uphold its international obligations, but has also failed its own constitution," she added.
The report documents the excesses carried out by the armed forces over the years and says the government's response to these violations has failed to deliver justice.
There was no immediate government response to the report.

The 400-member Santee Sioux tribe already runs a casino, hotel and ranch and hopes the resort will be a new revenue generator.
Marijuana is not legal in South Dakota but the tribe has been permitted to grow and sell pot since June.
It will open on New Year's Eve and only be sold on the reservation.
Sioux leaders would grow the marijuana to be offered in a smoking lounge.
The lounge would have games, food and a bar, and eventually slot machines and a music venue.
"We want it to be an adult playground," tribal president Anthony Reider told the AP news agency.
"There's nowhere else in America that has something like this."
Tribe leaders predict the resort would make up to $2m (Â£1.3m) per month.
Marijuana is growing at a facility on the reservation now and they hope to sell it for the first time on 31 December at a New Year's Eve party.
The Justice Department put out a new policy allowing Native American tribes to grow and sell marijuana in a similar way to some US states like Colorado in 2014.
The strict provision does not allow tribes to sell marijuana to minors or grow it on public land.
Marijuana will be sold in sealed one-gram packages for $12.50 (Â£8.27) to $15, and people will only be able to buy one gram at a time.
"[The tribe] must look at these opportunities because in order to preserve the past we do have to advance in the present," said Mr Reider.

Officers were called to Derby Road, Enfield at 15:30 GMT on Saturday after reports of a gun being seen in a car.
A Metropolitan Police spokesman said the reported car was stopped at 16:00 GMT and the four men inside were arrested.
They are currently being held at a north London police station.
Rights watchdog Amnesty International has called on India to revoke a draconian law which provides immunity to security forces accused of human rights violations in Kashmir.
[NEXT_CONCEPT]
A Native American tribe in the US state of South Dakota has said it plans to open what would be the first marijuana resort in the US.
[NEXT_CONCEPT]
Four men were arrested in north London when police found a gun, a sword and a knife in the car they were travelling in.