Introduction: According to social identity theory, identity competition plays a central role in the emergence and escalation of intergroup conflict, even when economic and political factors are also involved. This competition at both individual and group levels stems from efforts to fulfil basic human needs, including various psychological needs. Religions often address these psychological needs more comprehensively and powerfully than other cultural frameworks, making them especially influential in shaping and sustaining individual and collective identities. Aim: The study aims to examine the relationship among religious identity, intergroup threat, and intergroup contact among students. It also seeks to explore whether intergroup contact serves as a mediating factor in the relationship between religious identity and intergroup threat. Participants: A total of 200 participants (Hindu & Muslims) adults aged 21-35 years were drawn from different higher educational institutions of Haryana and Delhi, NCR by applying convenient sampling method. Religious identity, intergroup anxiety and out-group contact measure was used to assess the study variables. Results: Correlation analysis reveals that religious identity was found positively associated with intergroup threat whereas outgroup contact exhibited negative correlation with intergroup threat. Stepwise regression analysis shows that both religious identity and outgroup contact emerged as strong predictor of intergroup threat. Outgroup contact has also significantly mediated the relationship of religious identity and intergroup threat. Conclusion: The study highlights that stronger religious identity is linked to heightened intergroup threat, while increased outgroup contact reduces perceived threat. Outgroup contact significantly mediates the relationship between religious identity and intergroup threat, suggesting that fostering intergroup interactions can play a crucial role in mitigating identity-based conflicts among youth.