Prime Minister Narendra Modi on Saturday said India must build up its military might to the point that no other country "dare cast an evil eye" on the South Asian nation.

Modi made the statement at a ceremony in Mumbai for the commissioning of the country's biggest locally built warship.

"Our aim is to achieve such prowess in our defence capabilities that no country dare cast an evil eye on India," Modi told naval officers and other dignitaries.

India, the second most populous nation in the world, is in the midst of a $100-billion defence upgrade programme.

Modi's new government has raised the foreign investment cap on India's defence industries to speed up modernisation of the military.

India has fought three wars with nuclear-armed rival Pakistan, two of them over the disputed Himalayan territory of Kashmir.

The country has also been seeking to shore up its defence capabilities to counter a military build-up by an increasingly assertive China.

Modi said India must stop relying so heavily on defence imports and focus instead on local research, design and manufacture.

India is the world's largest arms importer with the United States recently overtaking Russia as the biggest arms supplier, followed by France and Israel.

"This warship has been built by India's engineers, technicians and defence experts," the premier, considered a hardline nationalist, said in Mumbai.

"It is the biggest example yet of what we can make in India," Modi said.

"It is the aim of this government to take India from its position of importing every little piece of military hardware to a position where we can export equipment."

Modi's right-wing Bharatiya Janata Party came to power in May after a landslide general election win.

The 6,800-tonne INS Kolkata is fitted with the most advanced weapons systems, sensors and communication technology.

It is expected to strengthen to India's maritime capabilities and help secure its huge strategic interests in the region stretching from the Gulf to the Malacca Strait.