"We are world leaders in software. But the software industry is high on the threat list," Pillai said while addressing a conference on the 'Challenge of terrorism to India's infrastructure and economy' in New Delhi.
The home secretary said software companies in India were now realising this fact and they were taking their own measures to protect themselves.
"And the government is also in partnership with many of the companies to make an effort to provide adequate security," he said.
Pillai said India's western coastline, hosting several petroleum and nuclear installations, was vulnerable to terror strikes from the sea route.
"Petroleum and nuclear installations located on the western coast are highly vulnerable," he said.
Pillai said steps were being taken to protect the country's 7,500 km-long coastline through a multi-layered security apparatus.
"We have been trying to plug the loopholes in coastal security. There is a series of highly attractive installations in the west coast. No doubt, it is still vulnerable," he said.
A good number of nuclear power plants, including the Bhabha Atomic Research Centre, are located along the western coast. Six refineries, including Reliance Industries Ltd, are also located along the west coast in places like Jamnagar, Mumbai, Mangalore and Kochi.
The Pakistan-based Lashkar-e-Tayiba terrorists who attacked Mumbai last year, had come to the city through the sea route.
Pillai said the government has improved the intelligence-gathering mechanism to a great extent during the last one year and the security agencies have successfully neutralised many terrorists who were planning fresh terror attacks.
According to earlier intelligence inputs, the Lashkar-e-Tayiba was planning to attack two schools -- Doon and Woodstock in Uttarakhand -- and hotels in Goa which are regularly frequented by foreign tourists.
The home secretary said the government was taking steps to deal with the Maoist problem and was taking action. "Basic governance in naxal area is more critical than anything else," he said.
Pillai said state governments have realised that security would soon be a major election issue if they did not provide security to the common people and started taking action.
Pillai said the time has come to "think the unthinkable" as terrorists were adopting new strategies to break the country's security.
"As we have seen from the David Headley case, one can still slip through the radar. Because we are not looking for them. This is one of the big problems. Because nobody would look for a US citizen, with a US passport and a business visa, you would not think that he is a terrorist," he said.
The home secretary said if it can happen to a US national, it can happen to the citizen of any other country, and favoured necessary steps to deal with such cases.
