The exercise gains significance as it is being carried out when the relationships between India and Pakistan are strained after the Mumbai terror attacks.
The lone arrested terrorist of the Mumbai attack, Mohammed Ajmal Amir Kasab, who allegedly came from Pakistan, had hijacked an Indian fishing trawler Kuber, which belonged to Porbandar, to reach Mumbai.
Madhavpur, a village on the Gujarat coast, has been chosen for the exercise due to its strategic location, as the state coastline houses important petroleum refineries in Porbandar's neighbouring district of Jamnagar, official sources said.
Around 1,500 personnel of the armed forces, apart from the top officials of the three services are taking part in the joint exercise, sources added.
The entire area where the exercise is taking place has been sealed off by the authorities and civilians are not allowed to watch the military exercise.
This is for the first time in the recent history that all the three services of the armed forces are engaged in a joint exercise on the Gujarat coast, officials said.
The exercise is being monitored by the top officials of the three forces, sources added.