Singh gave his annual address from the ramparts of the Red Fort in the Indian capital, which had been turned into a virtual fortress with nearly 80,000 police and troops guarding against a possible strike.
"As far as Pakistan is concerned, we expect from them that they would not let their territory be used for acts of terrorism against India," Singh said. "If this is not done, we cannot progress far in our dialogue with Pakistan," he added.
In New Delhi, police shut down public car parks, closed markets and declared a temporary no-fly zone to prevent aerial attacks on the main independence day venue. The United States warned in an advisory last week of a risk of attacks by militants in Indian cities.
Regretting the loss of life in held Kashmir, Singh said his government stood ready to talk with all parties in held Kashmir once calm had been restored. "The years of violence should now end. Such violence would not benefit anyone," he said.
Addressing the "serious challenge" posed by an increasingly violent Maoist insurgency which has spread across a large tract of eastern and central India, Singh urged the rebels to lay down their arms.
"I once again appeal to (Maoists) to abjure violence and come for talks," he said. In the Maoist-affected areas, rebels had put up posters ordering people to boycott independence day celebrations, calling them a "sham".
Pointing to strong economic growth despite the global financial crisis, Singh said India with its vibrant democracy had become "an example for many other countries to emulate."
"Our country is viewed with respect all over the world. Our views command international attention," he said. At the same time, he acknowledged that economic prosperity had yet to trickle down to India's masses who still suffer from "persistent poverty, hunger and disease."