She was speaking at a function organised by Associated Chambers of Commerce and Industry (ASSOCHAM) here.
Earlier, state Industries Minister M C Sampath in his speech requested the ministry's support in setting up a defence park in the state.
"I suggest the minister call the thinking heads in the defence industry, some from the forces, some from the industry, to sit together and discuss specific areas that would be futuristic," she said.
"You (Sampath) have said the state provides uninterrupted power supply, proper roads (to industries). You said you have the ecosystem. My suggestion to the minister is to speak to industry specialists, eminent defence personnel and hold talks on specifics that would be futuristic," she said.
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Assuring that the Centre would back an idea that was "futuristic" and serve for next 50 years, Sitharaman said, "See what are the things that small and medium enterprises cannot invest but defence industry needs."
She said India was the largest procurer of defence equipment.
Appealing to the industry leaders to come with fresh ideas, she asked, "Are we looking at just being secondary in this industry? Do we want to do something which is going to be innovative?"
"If you see the conditions they (army personnel) face in protecting the country, your heart melts. I'm being emotional here. But think what can be produced that can make his (army personnel) feet bear the chill. We should think big for which the state government and the Centre will have to work together," she said.