India can defend itself from anyone who seeks “to act against our country”, Prime Minister Narendra Modi said in an Independence Day speech on Tuesday amid a tense standoff with Beijing over a Himalayan plateau.

“Security is our top priority,” Modi said in a speech before thousands at the landmark Red Fort in New Delhi as the country marked the 70th anniversary of the end of British colonial rule.

“Be it the sea or the borders, cyber or space ─ in all spheres, India is capable and we are strong enough to overcome those who try to act against our country,” the Hindu nationalist leader declared.

His remarks came as New Delhi's dispute with Beijing over a strategically key Himalayan plateau enters its second month on Wednesday, with hundreds of soldiers reported to be facing off against each other.

The giant neighbours share a long history of mistrust and went to war in 1962 over the Indian state of Arunachal Pradesh, and are still embroiled in a dispute over the territory.

India's border row with Pakistan over the disputed Himalayan region of Kashmir has been going on since the split in 1947, with the recent ceasefire violations along the Line of Control escalating tensions between the two neighbours.

'Surgical' power

"Our security forces have always shown their capabilities whenever on duty. Whether it is terrorism or infiltrators, our security personnel have always been ready for sacrifice," Modi said in his speech

“When the surgical strike was carried out, the world came to know about the power that India possesses,” Modi added.

India claims to have carried out “surgical strikes” in Pakistan in September last year after an attack on an army base in India-held Kashmir, killing 18 soldiers. The Pakistan Army, however, has denied all such claims.

Modi added that “bullets and abuses” cannot bring peace in Kashmir ─ where there are an estimated 500,000 Indian troops ─ but also accused Kashmiri separatists of “scheming”.

War on graft

During his speech, Modi offered an impassioned defence of his war on corruption, declaring a controversial move to flush out tax cheats a huge success that netted billions.

Modi said his shock decision to devalue India's largest banknotes had paid dividends, bringing $46 billion in undeclared wealth back into state coffers.

The sudden removal all 500 and 1,000 rupee notes from circulation compelled millions to join the formal banking sector for the first time, but triggered a painful cash shortage in the world's fastest-growing major economy.

Previously, around 90 per cent of everyday transactions in India were in cash.

But Modi, who has stood by the controversial policy even as economists have blamed it for curtailing growth, said trillions of rupees had returned to India under his administration's crackdown on tax dodgers.

“India is celebrating honesty today. The corrupt have no place to hide anymore,” he said.

More than 300,000 shell companies associated with so-called “black money” had been red-flagged and over 100,000 trading licences revoked under a sweeping clean-out of India's graft-riddled economy, Modi added.

He used independence day to urge his countrymen to embrace a “New India” where the “poor shall have concrete houses, where farmer income shall double, where youth and women will get ample opportunities”.

“An India which is free of casteism, terrorism, corruption, nepotism. A clean India,” he said.

He also hailed the introduction of a nationwide goods and services tax in July as a success that had doubled the number of new taxpayers this year to 5.6 million ─ a tiny fraction of India's 1.3 billion.