India on Monday said it was 'conscious and alert' about China's military modernisation and infrastructure development in Tibet and adjoining areas and noted that it had taken 'necessary steps' to restructure its force levels along the border.
"India remains conscious and alert about the implications of China's military modernisation. Rapid infrastructure development in the Tibet Autonomous Region and Xinjiang province has considerably upgraded China's military force projection capability and strategic operational flexibility," it said in the defence ministry's annual report for 2009-10.
"Necessary steps have been initiated for the upgrading of our infrastructure and force structuring along the northern borders," the report, which was released in New Delhi, added.
Noting that Sino-Indian relations had progressed well last year with convergence of views and actions in global fora, the defence ministry said a regular mechanism for exchanges in the military sphere too were established through ongoing confidence building measures.
"The relations with China have generally progressed well in the last year based on their strategic and cooperative partnership. There has been a convergence of views and actions on various issues of international fora," it said.
"A regular mechanism for exchanges in the military sphere has been established through the ongoing confidence building measures between the armed forces of both countries and other military interactions," it added.
Expressing concerns over worsening security situation inside Pakistan and the increasing infiltration by militants trained in the neighbouring country into Jammu and Kashmir, the report said the rising tide of extremism within Pakistan had posed a serious threat, not only to itself, but to the entire region.
"The increasing incidents of terrorism within Pakistan targeting, inter alia, the security establishment and senior military personnel, and the rising tide of extremism underlined the serious threat to Pakistan itself and to the region," the report said.
It noted with satisfaction the 'progress' made by Pakistan in tackling 'jihadi' insurgency in Swat and the adjacent districts and also in South Waziristan.
"The continued infiltrations across the LoC and the existence of terrorist camps across the Indo-Pak border, however, demonstrate the continuing ambivalence of Pakistan in its actions against terrorist organisations," it said.
Pointing out that India had 'exercised exemplary restraint in the face of gravest provocation,' the report asked the neighbouring control to take effective steps to address concerns on terrorism directed against it from the territory under Pakistan control.
"India has never shut the door for dialogue with Pakistan, and is of the view that meaningful dialogue with it is possible only in an environment free of terror or threat of terror. This calls for Pakistan to take effective measures to dismantle the infrastructure of terrorism on its soil which is directed against India," the report said.
Focusing on Afghanistan, the report observed that 'the security and stability of Afghanistan is critical to India's own security concerns,' even as it took note of the deployment of additional 30,000 US troops in the Af-Pak region by May this year and President Barack Obama's July 2011 time frame for troop withdrawal from that country.
On the other hand, the report praised Bangladesh. "Relations with Bangladesh have been strengthened since the restoration of multi-party democracy in that country. India is appreciative of the increasing cooperation with Bangladesh in security matters, especially vis-a-vis Indian insurgent groups operating from its territory," it said.
On Myanmar, the report said cooperation with the eastern neighbour in security matters was being enhanced, while India continued developmental activities in the country which lies at the tri-junction of South and South-East Asia.
The report also called the post-Liberation Tigers of Tamil Eelam scenario in Sri Lanka as a 'historic opportunity' to find a lasting political settlement in northern Sri Lanka with the conclusion of the military operation against the Tigers.
On Iran's controversial nuclear programme, India said it continued to support a peaceful resolution of the issue, which would be in the interest of peace and stability in West Asia.
The report also took note of the worldwide economic slowdown, saying the challenges confronting the global financial system created strains in the global security environment.
Regarding the internal security challenges, the report said the focus had shifted from the proxy war in Jammu and Kashmir to Left wing extremism and insurgency in North-Eastern states.
It said the arrest of the top leadership of United Liberation Front of Asom including its chairman Arabinda Rajkhowa had been a major breakthrough.
On Jammu and Kashmir, the report said 'all parameters of proxy war are at an all time low and the current situation indicated a shift towards normalcy and peace.'
"The ceasefire on the borders and Line of Control is holding out with a few minor aberrations," it added.
Despite improving security situation in the state, infiltration attempts continued and between April 2009 to February 2010 there were 33 infiltration bids that were foiled with 50 terrorists killed in the process.
During the same period, 213 terrorists were also killed and 68 apprehended in encounters with the armed forces in the state.