In an address at the on-going Navy commanders' conference, she also took note of the critical capability shortfalls the Navy was facing in ship-borne multi-role helicopters, conventional submarines and minesweepers which are required urgently to maintain its combat edge.
The minister assured the commanders that that these issues were being given due impetus and efforts were in hand to mitigate these shortcomings at the earliest, Navy Spokesperson Captain D K Sharma said.
He said the commanders also reviewed the Navy's readiness to deploy over the entire range of missions in the maritime domain.
In her address, Ms Sitharaman talked about the challenges India was facing in the maritime domain and complimented the Navy for its high operational readiness.
"Taking note of the recent developments in our maritime neighbourhood, she emphasised the need for the Indian Navy to be strong at sea, and be ever ready and vigilant to counter any challenges in the maritime domain," Captain Sharma said.
Official sources said China's increasing presence in the Indian Ocean Region (IOR), its fresh military deployments in the geo-politically sensitive South China Sea and efforts to increase its overall dominance were discussed at the four-day-long conclave which began on Tuesday.
Ms Sitharaman acknowledged the high operational tempo maintained by the Navy in the last one year through regular deployment of ships, submarines and aircraft from the South China Sea and Sea of Japan in the East to the Persian Gulf and the Atlantic Ocean in the West.
She also complimented the force for its sustained efforts to deter piracy attempts off the Gulf of Aden.
Yesterday, the naval commanders had cleared a new plan for deployment of warships in the Indian Ocean region to effectively counter China's growing assertiveness in the strategically key region.
The "new mission-based deployment" plan involves deploying mission-ready ships and aircraft along critical sea lanes of communications, Navy sources said.
The minister also commended the efforts of the Navy to constructively engage with the Indian Ocean Region (IOR) littorals to build their capacities and enhance their capabilities.
She further stated that Milan exercise at Port Blair early next year would be an excellent forum to get the littoral Navies on a common platform to discuss regional maritime issues and security challenges, Captain Sharma said.
In her address, Ms Sitharaman also mentioned about unprecedented success of the Malabar exercise with the US and the Japanese Navy earlier this year.
At the conference, the top-level leadership of the Navy reviewed major operational, training and administrative activities undertaken in the last six months.