New Delhi: The Chief of the Integrated Defence Staff Air Marshal PP Reddy on Monday warned that India should be prepared for war on both fronts, namely China and Pakistan.

He also said that a nuclear war in the subcontinent could not be ruled out.

Reddy added that China was supplying weapons to Pakistan.

"Both our neighbours are equipped with nuclear weapons. There is a possiblity of rise in terrorists attacks. India has to be cautious from both the sides and should be prepared for any war," said PP Reddy.

He further said, "China is building ports, providing loans and exporting arms to all our neighboring countries. However, the state of our defense doesnt allow us to compete with China."

The alarming statement from Reddy has come at a time when heavy exchange of firing is going on between Indian troops and Pakistan rangers at the Line of Control.

Air Marshal PP Reddy took over the charge of Chief of the Integrated Defence Staff in July last year.

Meanwhile, the United States has cleared the path to grant financial aid to Pakistan. The US Secretary of State John Kerry has certified that the Pakistani government has taken appropritate action against terror groups like the Lashkar-e-Toiba and Jaish-e-Mohammed (JeM), a criteria which makes Pakistan eligible for aid.