NEW DELHI: India Monday said it was "conscious and watchful" of China's growing military profile and its implications in the immediate neighbourhood, despite its policy of engaging Beijing on the principles of mutual trust and respect for each other's interests and concerns.
"India remains conscious and watchful of the implications of China's military profile in the immediate and extended neighbourhood," the defence ministry said in its annual report for 2011-12 that was released here.
China had last month announced a $106-billion defence budget, which is nearly three times that of India's $40 billion defence spending fixed for 2012-13.
"Although the unresolved boundary dispute between India and China has been a factor in India's security calculus, India has a strategic and cooperative partnership with China, in which the effort has been to world on areas of mutual interest which would enable both countries to pursue common goals of growth and development," the report said.
"India's policy has been to engage with China on the principle of mutual trust and respect for each other's interests and concerns," it added.
On Pakistan, the report said the undiminished activities of terrorist organisations functioning from Pakistan's territory had been a cause for concern for India's security.
However, India has maintained that a strong and prosperous Pakistan is in the best interest of India and New Delhi has supported dialogue and engagement with Islamabad, it said.
"However, the existence of terrorist camps across the India-Pakistan border and continued infiltrations across the Line of Control continue to pose a threat," the report added.