New Delhi, Nov 22 India will continue to confront formidable security challenges in the neighbourhood, Prime Minister Manmohan Singh said Friday adding that there was need to exercise prudence in defence acquisition plans due to the slowdown in the economy and to “cut our coat according to our cloth”.

Addressing the combined commanders’ conference here, the prime minister said though the country needs to take into account the capabilities of its adversaries, the long-term acquisition had to be planned on the assumption of limited resource availability.

“We need to match our investment in military equipment and forces to our national resources. During most of the past decade, we have had the benefit of average annual growth rates of eight percent. But the past two years have seen slow growth and we continue to face an uncertain international economic climate marked by volatile exchange rate fluctuations and the possibility of fragmenting trade regimes,” he said.

The prime minister said he had no doubt the country would overcome current economic slowdown, but “we will have to exercise prudence in our defence acquisition plans and cut our coat according to our cloth”.

He said the driving principle was to create a military that is driven by abiding interests, as opposed to the transient threat.

“We remember with particular pain and sadness our sailors who perished in the submarine (INS Sindhurakshak) accident in Mumbai and our soldiers who died defending our borders and combating terrorism. We also recall our pilots and airmen, who sacrificed themselves to rescue precious lives in Uttarakhand,” he said.

Referring to the role of internet in the age of globalisation and worldwide surveillance done by the US, the prime minister said India needs to develop comprehensive national power.

“The global surveillance operation mounted by the US National Security Agency is also a policy imperative for us. Naturally, our objective must be to acquire tangible national capacity, or what the lexicon now refers to as comprehensive national power,” he said.

“This is the amalgam of economic, technological and industrial prowess, buttressed by the appropriate military sinews,” he said. The prime minister said India must take advantage of a favourable international environment to build a domestic defence industrial base.

“For too long, we have debated the merits of private versus public sector. It would be more useful to think in terms of aggregate national capacity that harnesses the full power of our public sector, private enterprises, research laboratories and universities to create an innovative and efficient indigenous base for production, research and development,” he said.

Asserting that “the political leadership of India has the highest faith in its military,” the prime minister said, “The apolitical nature of our military and its proven professionalism are the envy of the world.”