The Cabinet Committee on Security, chaired by Prime Minister Manmohan Singh, took into account the developments surrounding cancellation of the contract and its possible wider consequences, sources told PTI.
The meeting was told that anti-India sentiment exists in Maldives among a small section but such people are even in the government.
In view of this, India is not ruling out the possibility of its interests being hurt "directly", a reference to its citizens or assets being harmed, the sources said.
It was noted that rule of law is weak and India will have to be ready with proportional response to deal with any contingency.
Accordingly, various options were considered, which included stronger measures to protect India's interests, the sources said.
It was decided that this measure should not be resorted to as of now and the situation should be dealt with through diplomacy.
The Maldivian government has given assurances that India's interests would be protected, the sources said, adding however that "nothing can be ruled out" considering the fact that small sections are raising anti-India sentiments. (More)