He was speaking at a seminar on 'emerging technologies for sub-conventional conflict and homeland security' organised by the Confederation of Indian Industry.
The minister also cautioned about weapons of mass destruction falling into the hands of terrorists.
'In future the potential is there for terrorists to get nuclear or biological and chemical weapons, towards which we should take adequate steps... nuclear, biological and chemical warfare is something we are preparing for,' Raju said.
He cited the example of the Nov 26 Mumbai attacks when terrorists used sophisticated weapons.
'Terrorists, militants and insurgents are acquiring advanced weapons and communication equipment. Their methods of warfare are becoming more sophisticated, more complex and more systematically planned. Their objectives are becoming more ambitious, with the intention of inflicting maximum damage.
'In future, we may even see insurgents armed with nuclear devices or biological and chemical weapons, capable of massive destruction in localised areas. The increased range and lethality of weapons as well as changed tactics and small focused insurgent missions will need strategic response from our defence and paramilitary forces,' Raju added.