Assessing the Indian neighbourhood at a conference in London, he said India and China have various similarities but between this exists "a historic, unresolved territorial dispute accentuated by concerns over each other's strategic partnerships."
"The problems of terrorism and the lack of progress in bringing the perpetrators of the Mumbai attacks to justice hinder the progress of bilateral relations," he said.
Verma said talks over the Siachen and the Sir Creek boundary issues reiterated Indian intentions to have a dialogue through diplomatic channels with its western neighbour.
On Sri Lanka, the navy chief said India has been expressing concern over the plight of the Internally Displaced Persons for which it has provided robust assistance.
"In the maritime context, sale of an offshore petrol vessel and transfer on lease of another, assistance for their refits and restoration of the KKS harbour have been the highlights other than SLINEX joint naval drill between the two countries," he said.
On the exercises and relations with other armed forces, Verma said as part of navy's cooperative engagement initiatives, some of the navy ships were returning after joint drills in East and South China Sea while some including the aircraft carrier INS Virat are in the Mediterranean. He said the navy has trained 853 personnel from friendly countries and this number is set to increase in the coming times.