"Modernisation of armed forces in China and its ever-increasing military spending is a matter of serious concern but we are not unduly worried because we also will have to modernise and strengthen our armed forces," Antony told reporters on the sidelines of the Asian Security Conference here.
"We also must strengthen our capabilities and infrastructure in our area and we are doing it. Government is also modernising armed forces and strengthening infrastructure in border areas," he said.
After China started deploying missiles and strengthening its military infrastructure along the Indian territory, India has also upgraded its roads and aviation infrastructure there.
It is also in the process of deploying four squadrons of the Su-30 MKI air superiority aircraft along with the raising of two new Mountain Divisions of the Army.
The Minister said the review of capabilities of armed forces was an "ongoing and constant" process and the defence preparedness was being reviewed on a regular basis and "if there are any gaps, they will be filled up."
Asked if Indian military modernisation was moving at a slower pace than China's, Antony said, "We are not modernising our armed forces by keeping in mind any other country's modernisation. We are modernising our forces on the basis of a comprehensive review of the emerging security scenario around us."
On the reported Chinese objections over the trilateral Malabar series of war games between India, America and Japan, the Defence Minister said, "Malabar exercise started 15 years ago and we hold it every year. There is nothing against a particular country. It is to increase capabilities of our Navy."
Antony said, "As two largest nations in the region, India and China need to enhance cooperation levels on common issues such as climate change and trade."
On the unresolved border issues between the two countries, the Defence Minister said, "The complicated border issue can be settled only through dialogue and discussions."