"India must consider cyber security as an essential component of national security and foresee and plan for various challenges arising out of the growth of internet and digitalisation of governance.
"Threats abound: cyber crime, cyber espionage, cyber war and cyber terrorism, all represent genuine risks to nations, firms and individuals around the world," he said in a statement here.
Lall said cyber attacks can affect critical infrastructure like the banking system, air traffic control, power infrastructure and gas pipelines.
With the rapid march of technology, such attacks will only become more widespread as the use of internet for manipulating things increases, he said.
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"We have now entered into a new phase of conflict in which cyber weapons can be used to create physical destruction in someone else's critical infrastructure. And there is a distinct possibility that the disruptions and dislocations it causes are permanent, severe and lasting," he said.
Since 2000-01, there have been regular reports of Pakistani cyber criminals defacing Indian websites and writing derogatory messages against India. On the other hand, China has become a formidable adversary in cyber space.
"India must take an early lead in creating a framework where the government, the national security experts and the industry catering to strategic sectors of economy, can come together, to pursue the goal of cyber security in the larger national cause," Lall said.