India annually spends 14 billion dollars, or 2.34 percent of its Gross Domestic Product (GDP), on its military. Since 2004 it has either used or committed billions of dollars in modernisation projects planned until 2010.
"It is a harsh reality that defence expenditure involves huge outlays on acquisitions," Foreign Ministry Pranab Mukherjee told visiting defence officials from 40 countries including Britain, China, Germany and the United States.
"There is no denying the fact that the challenge of modern warfare with the likely nuclear, biological and chemical dimensions cannot be met with outdated technologies," he said.
"These assume greater significance because of unfathomable dangers arising from proliferation of nuclear technologies over the years and the capability acquired by international terrorist organisations."
"And therefore there is no escape from modernisation of the defence forces," said Mukherjee, who until last month held the defence portfolio.
His thinly-veiled warning to Pakistan came on the eve of the resumption of peace talks with India's nuclear-capable rival. Talks had been on hold following the July train bombings in Mumbai which left 186 people killed and 800 injured.
India has in the past two years spent 7.0 billion dollars on acquisitions including 1.43 billion dollars on 26 British trainer jets, 1.2 billion dollars on six French submarines and 1.5 dollars on a Russian aircraft carrier.
Its immediate shopping list includes 126 fighter jets worth 6.5 billion dollars, artillery for 1.5 billion dollars as well as plans to construct an air defence ship worth 2.2 billion dollars, according to available estimates.
India will also hold talks with Chinese President Hu Jintao who arrives on November 20.
India's junior defence minister Pallam Raju, attending the three-day conference, backed Mukherjee by saying India could not afford to lower its guard.
"India has been a big spender in this part of the globe in 2004 and 2005 and it is unlikely the scale of expenditure will see any abatement in the foreseeable future given the unfolding security scenario and the related threat perception including terrorism in many forms and shapes," Raju said.

Copyright AFP (Agence France-Presse), 2006