Pointing out that the armed forces were being modernised on a war footing, he said India did not want an arms race in the region but would not close its eyes to the procurement of weapons in its neighbourhood.

"The country needs a minimum deterrent. When the economy is moving fast, we have to take care that the security of the country is fine. There are some irritants with some of our neighbours," said Antony, who is on his first visit to this region in northern Jammu and Kashmir.

"We are trying to upgrade the weaponry of our forces," he told army and air force personnel here. "We do not want to compete (in an arms race) with any country of the region.

That is not our policy, but at the same time we can't close out eyes to what is happening in the surroundings," said Antony, who apologised to the troops for not speaking in Hindi.

Troops guarding the Line of Control should not lower their guard though infiltration from across the border has reduced, he said. "India wants peaceful relations with its neighbours... But we should not lower our guard and have to remain vigilant to face any challenge," Antony said.

Calling for extensive vigilance to meet the challenges posed by cross-border terrorism and infiltration, he said, "We cannot say that the situation is alright" as long as they continued. "We must be prepared for all kinds of challenges from any quarters."