In the wake of China's massive armed forces' modernisation plans, India has said it is "conscious and watchful" of the implications of Beijing's evolving military profile in its immediate and extended neighbourhood.
It, however, has said the country's relations with China are of "crucial importance" and its policy is to engage Beijing on the principles of "mutual trust and respect and sensitivity for each other".
"India is conscious and watchful of the implications of China's evolving military profile in the immediate and extended neighbourhood," the defence ministry in its Annual Report for 2010-11 has said.
The remarks come at a time when China is building and developing military capabilities in its areas adjoining India and also in places under Islamabad's control such as the Pakistan-Occupied Kashmir.
It is also reportedly building its military assets in countries like Myanmar, Sri Lanka and Pakistan.
China with an official defence budget of more than $91 billion, almost three times the Indian defence budget of around $35 billion, has built a network of rail lines and more than 58,000 km of roads in the Tibet Autonomous Region (TAR) along with nuclear missile silos.
Five airfields in TAR have become operational and include Gongar, Linchi, Pangta, Hoping and Gar Gunsa.
In response to the enhanced Chinese military activity, India has also started building its capabilities to meet the security challenges.
Recently, defence minister A K Antony had said the government was taking "necessary steps" in consonance with its national security concerns.
"Military capacity enhancement and modernisation of armed forces is a dynamic process, which takes into account the cumulative challenges envisaged by the nation," he had stated.
The steps include the raising of two Mountain Divisions of the Army in the northeast, deployment of four squadrons of its frontline Su-30 MKI fighters.
Besides, it is also considering deployment of Ultra Light Howitzers (ULHs) and light tanks in the territories along the LAC.
Several new and old air fields have been activated and new roads constructed to enable a quicker movement of troops and equipment in the region.