China's role in operating a strategically important port in Pakistan is a "matter of concern", defence minister AK Antony said on Wednesday, as New Delhi and Beijing jostle for influence in the region.
Indian policy-makers have long been wary of a string of strategically located ports being built by Chinese companies in its neighbourhood, as India beefs up its military clout to compete with its Asian rival in what it sees as its sphere of influence.
Management of Gwadar port, around 600 km (370 miles) from Karachi and close to Pakistan's border with Iran, was handed over to state-run Chinese Overseas Port Holdings last week.
When complete, the port -- which is close to the Strait of Hormuz -- a key oil shipping lane, is expected to open up an energy and trade corridor from the Gulf across Pakistan to western China.
India, the world's biggest arms importer in recent years plans to spend around $100 billion over the next 10 years in upgrading its mostly Soviet-era military hardware to keep pace with China's ramping up of defence spending.
The country was bound to modernise its armed forces in response to China's own modernisation, Antony told reporters at a press conference at an air show in Bangalore, adding that strengthening its north-eastern border with China was not a confrontation with its neighbour.
"It is our duty. If they are doing it, we will also do it," said Antony, adding that the presence of a Chinese delegation at the show was a "welcome step," without elaborating.
Despite the push to overhaul its military, India's defence budget will not escape a tightening of government spending this year, Antony said, as New Delhi looks to rein in its fiscal deficit.
"Our priority areas will not face budget cuts. Those essential to operational preparedness, there won't be any budget cuts," Antony said.
A long-awaited deal for India to buy over 100 Rafale fighter jets from France's Dassault Aviation is being reviewed by a cost negotiation committee, Antony said, adding that the delay in finalising the deal was not due to budget cuts.