Instability growing in India's neighbourhood - Defence Minister

India's most important challenge in the foreseeable future is the growing instability in its neighbourhood, Defence Minister A.K. Antony said here Tuesday.

'It is also to be seen whether the recently formed civilian government in Pakistan is able to address issues of national security, religious fundamentalism and cross border terrorism effectively,' said while addressing the Unified Commanders Conference.

Turning to China, Antony said: 'There is enough space for the two countries to mutually cooperate and develop, while remaining sensitive to each other's concerns.'

The agreement between the two countries on maintaining peace and tranquillity, the confidence building measures and the memorandum of understanding on defence cooperation 'need to be pursued by both nations', the minister added.

'Engaging China in a dialogue and trying to resolve outstanding issues is the right way ahead,' Antony said, pointing out that External Affairs Minister Pranab Mukherjee's recent visit to Beijing 'was a step in this direction'.

Besides this, humanitarian aid worth $5 million was provided to China in the aftermath of last month's devastating earthquake. On Bangladesh, Antony said a prolonged period of political vacuum or uncertainty could have an adverse impact on India. Illegal immigration and infiltration are two major security related issues of serious concern, he added.

The defence minister said New Delhi was keeping a close watch on the security situation in Sri Lanka.

'Any deterioration in the security situation in Sri Lanka will no doubt have an adverse impact on peace and security within India,' he maintained.

On Myanmar, Antony said: 'We should continue to play a constructive and positive role through continuous dialogue.'

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