More than 10 warships from the Indian Navy including the aircraft carrier INS Vikramaditya, three submarines and various naval aircraft participated in the show.
The navy said Ms Sitharaman "presided over" complex naval operations including air interceptions, missile, gun and rocket firings, ship-to-ship replenishment, night flying and anti-submarine operations during the two-day-long show which began yesterday.
The western fleet of the navy undertook the manoeuvres off the western seaboard of India to showcase operational excellence and combat capabilities.
The defence minister initially embarked INS Kolkata, the first of the indigenously built Kolkata Class destroyers and then spent the night at sea on-board aircraft carrier INS Vikramaditya.
"To assess the performance of the carrier in real conditions, Sitharaman 'transited' through a simulated 'multi-threat' environment on-board along with her 'escorts' during the night of January 8," the navy said in a statement.
"Having witnessed first-hand the prowess of the Western Fleet, I am confident that the Indian Navy is fully capable of defending the nation against any form of threat," she was quoted as saying by the navy.
Ms Sitharaman said the navy's "mission based" deployments in the Indian Ocean region have effectively contributed in keeping the seas safe.
The navy had operationalised a new 'mission-ready' plan for aggressive deployment of warships in critical sea lanes around five months ago, seen as a move to counter China's growing assertiveness in the Indian Ocean region.
Ms Sitharaman said the government was sparing no efforts to enable and empower the armed forces as they "stand firm" on the country's borders.
"I am confident that your presence and preparedness will deter our adversaries from attempting any actions detrimental to our sovereignty and safeguard our interests," she said. She disembarked the ship by naval helicopter to INS Hansa in Goa today.