"It is a harsh reality in today's world that India, due to its geographical location, has to remain prepared. Our defence preparedness itself is our best defence," he said in Hyderabad.
Jaitley added that even though the entire country had confidence in the armed forces, which represented some of the best traditions anywhere in the world, "as part of our preparedness, we obviously need to equip our forces with all the support system they require".
The Union minister was in Hyderabad to attend an event marking the handing over of a long range surface-to-air missile to the Indian Navy.
On the occasion, Jaitley said Indians were now capable of offering services to other developed economies at a cheaper price.
"There is hardly any country in the developed world, where the presence of Indian minds is not visible, be it in the field of medicine, science or technology. And therefore, not only do we have a large human resource pool, we have surplus resources which serve other countries too," he added.
The defence minister said India's resources, compared to other economies in the world, were available at a very competitive price.
"That being a reality, over the last few decades we have seen some of the best companies — be it pharmaceutical or information technology (IT) — shifting their research and development bases to India," he added.
Jaitley also took part in a number of programmes, including the ground-breaking ceremony of the second phase of facility creation at the Bharat Dynamics's (BDL) Ibrahimpatnam unit and inauguration of the ASTRA weapon system production at the BDL's Bhanur unit.