The remarks by Sharif come against the backdrop of spike in Indo-Pak tensions over the death sentence awarded to Indian national Kulbhushan Jadhav by a military court and on a day when New Delhi warned Islamabad to consider the consequences on bilateral ties if he is hanged.
Sharif at the same time said that Pakistan wants good relations with all countries, particularly its neighbours.
"The nation has full trust in the country's armed forces," he said, assuring the forces of government's full support in equipping it to address modern day challenges.
Jadhav, the 46-year-old former naval officer, has been sentenced to death for alleged "spying".
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Reacting strongly to the move, India summoned Pakistan High Commissioner Abdul Basit in New Delhi yesterday and warned Islamabad that it is a case of "premeditated murder".
Addressing the passing out parade of graduating cadets at Pakistan Air Force Academy (PAF) Asghar Khan in Khyber- Pakhtunkhwa, Sharif said that cooperation, rather than conflict and shared prosperity, rather than mutual suspicion, is the hallmark of Pakistan's policy.
He said Pakistan on its part will never hesitate to extend the hand of friendship to all and will never waver from returning goodwill with even more goodwill.
Sharif, however, said "despite our desire for peaceful coexistence, we cannot remain oblivious to defending our sovereignty and protecting our independence".