India says, it is conscious and watchful of Beijing's rising military profile in the immediate and extended neighbourhood. In its annual report for 2011-12 released yesterday, the Defence Ministry noted that China has upgraded its military force projection against India through rapid modernisation.

The report said, the Army is fully seized of the security scenario and has identified strategically important infrastructure requirements along the Line of Actual Control (LAC) and they are being developed in a phased manner. The report said India has been desirous of cordial relations with China and to this end, a policy of positive engagement and maintaining peace and tranquillity along the LAC is ensured.