National Security Advisor Ajit Doval also emphasised that India wants to have friendly relations with an economically-growing China without compromising on territorial sovereignity.
"We would like to resolve our problems through negotiations, through talks. I don't think of any problem that cannot be resolved through negotiations," he said, against the backdrop of recent escalation in ceasefire violation by Pakistan.
"But on the other hand, India would like to have an effective deterrence to deal with terrorism," Doval said.
"I think developing better relations with neighbourhood is important. India's economic development could bind together the region which could see a vested interest that India's growth will bring more opportunities and they should not feel undermined," he said.
Turning to China whose troops have been indulging in incursions across the Line of Actual Control (LAC), he said India considers it as "a very important neighbour" with with "we have had good relations for centuries".