Defence Minister A K Antony on Monday said there was "no room for complacency" on the Sino-Indian border while maintaining that India would abide by the bilateral confidence building measures with China.

"We have to constantly upgrade our military and economic capabilities," the minister told army commanders while referring to relations with China as he opened the five-day top army commanders bi-annual conference in Delhi.

His remarks are significant as the minister has just undertaken a major tour of the Sino-Indian frontier in Arunachal Pradesh.

The defence minister also said that Pakistan was continuing to provide covert support to perpetrators of the cross border terrorism and hoped for a "more meaningful engagement with the newly elected government in Islamabad."

Hoping that Islamabad would take steps to curb cross-border terrorism effectively, Antony said on its part Indian forces would have to be vigilant on all fronts.

Antony remarks on terrorism came as the main focus of the annual commanders conference, specially the recent attempts to rake up an upsurge in Jammu and Kashmir [Images].

In his first comment on Nepal, Antony said winds of political change were sweeping the Himalayan country.

Describing the changes taking place in Nepal as a "defining moment" for the country, he said India was committed to help Kathmandu in every way to ensure an orderly and constitutional transition to multi-party democracy.

On the opening day, the army commanders dwelt on the subject specially the recent conference held in Pakistan-occupied Kashmir, which vowed to raise the militancy pitch in Jammu and Kashmir.

Antony said that incidence of violence in Jammu and Kashmir had registered a significant drop and a relatively conducive atmosphere had been created for assembly elections in the state due later this year.

On the Naxal situation, Antony ruled out any role for the army to counter the menace.

"The army has provided assistance to states by setting up counter terrorism institutions," he said.

"The task clearly lies in the realm of state police forces, Central police orgnaisations and paramilitary forces and they must develop the requisite capacity and efficiency to deal with the menace," Antony said.