Addressing the nation from the Red Fort on Independence Day, Modi said: "Our armed forces are the pride of the nation. To further sharpen coordination between all three forces, India will have a Chief of Defence Staff - CDS. This is going to make the forces even more effective. The new CDS post will oversee all the three wings of the armed forces."
Defence Minister Rajnath Singh welcomed the announcement, tweeting: "The Institution of CDS by PM Modi has been made keeping in view the much needed reform to streamline and further improve the coordination among the 3 forces and their functioning."
"CDS will have a long lasting and a positive impact on India's security," Singh posted.
The creation of a CDS post had been a major recommendation of the Kargil Review Committee of integration of the three services Army, Navy and Air Force under a Chief of Defence Staff. However, no concrete action was taken on this.
The government appointed Lt Gen D.B. Shekatkar (Retd) as head of a 11-member committee to recommend measures to enhance the combat capability of the armed forces and rebalance defence expenditure.
The committee suggested a four-star Chief of Defence Staff as the chief military adviser to the Defence Minister.
The Prime Minister's announcement was welcomed by former military General Ved Prakash Malik, who was the Army chief during the Kargil war.
"Thank you PM Modi for announcing a historic step of institution of CDS. This step will make our national security more effective and more economical. It will ensure better jointmanship and multi-disciplinary coordination. Salute," he tweeted.
( With inputs from IANS )