TOKYO,(WSJ)—The leaders of Japan and India pledged to step up defense and economic cooperation Monday as the two Asian powers aim to build a strategic counterweight to China.

Indian PM Modi Wants Closer Ties With Japan to Counter China

Indian PM Modi Wants Closer Ties With Japan to Counter China

As he begins to paint clear visions for his diplomatic policy, India's new prime minister Narendra Modi is on a five-day tour of Japan this week, where he and Japanese Prime Minister Shinzo Abe have emphasized rapidly growing ties between Asia's two biggest democracies, as well as a budding personal friendship between them.

At their joint news conference Monday, Mr. Abe described their bilateral relations as having the "most potential in the world." Mr. Modi noted his discussions with Mr. Abe elevated the strategic and global partnership between their countries to a "special" level.

A joint statement signed by the two leaders was heavy on plans for cooperation in the security area. They underlined the importance of close dialogue between top foreign affairs and defense officials, pledged holding joint military drills regularly and welcomed progress on talks to transfer Japan's defense and nuclear technology to India.

Growth in security cooperation will be matched by closer economic and trade ties. Mr. Abe unveiled a plan to double the amount of Japan's direct investment and the number of Japanese companies operating in India in five years, and pledged a total of 3.5 trillion yen in Japanese investment over the next five years. Mr. Abe also expressed hopes to introduce Japan's shinkansen bullet train technology to India.

While the two leaders didn't mention China by name, the presence of the nation whose growing military capability and aggressive territorial behavior have alarmed its neighbors was palpable. In a speech to business leaders, Mr. Modi took a swipe at China as he discussed the need for India and Japan to forge a closer partnership to promote peace and prosperity in Asia and counter an "expansionist" mind-set. It was seen as a veiled but clear reference to China, which is embroiled in territorial disputes with both New Delhi and Tokyo.

Indian Prime Minister Narendra Modi delivers a speech at the headquarters of the Japan Business Federation in Tokyo on Monday. Agence France-Presse/Getty Images
"Everywhere around us, we see an 18th century expansionist mind-set: encroaching on another country, intruding in others' waters, invading other countries and capturing territory," Mr. Modi said.

Mr. Modi's comments Monday are the clearest sign yet that the Indian leader intends to throw in his lot with Japan, a U.S. ally that is trying to rally Asian nations to form a united front as they face an increasingly well-armed and assertive China. If he sticks to his stance, it could have wide geopolitical consequences.

India has been at the center of Mr. Abe's strategy to build closer diplomatic and defense alliances with nations in the Asia-Pacific. In January, Mr. Abe's busy travel schedule took him to Delhi, where he viewed a military parade on Republic Day. In July, Tokyo joined a military exercise with India and the U.S. known as Malabar. Japan's easing of weapons exports rules under Mr. Abe has also raised expectations that Japan may soon provide military aircraft to India.

The blossoming friendship between the two leaders—both known for their nationalistic views and pledges of ambitious economic reform plans—has been on full display since Mr. Modi arrived in Japan on Saturday, accompanied by a large delegation of business executives. Mr. Abe made a special trip to Kyoto and welcomed Mr. Modi with a bear hug, a highly unusual gesture from a politician in Japan where physical contact in public is kept to minimum. The two sat down for an informal dinner, fed fish in a koi pond, and took a walk through a Buddhist temple in Japan's ancient capital before Mr. Modi's official schedule in Tokyo started Monday morning.

During his first 100 days in office, Mr. Modi has shown a good deal of alacrity in defining his foreign policy priorities. His advisers say he is driving a business-focused diplomacy aimed at increasing investment and growth in India, while sharpening his focus on India's security and military preparedness.

After his election in May, Mr. Modi moved quickly to repair India's strained relationships with its neighbors such as Nepal, Bangladesh and Bhutan in an effort to reestablish New Delhi's supremacy in South Asia, where China has made inroads in recent years by bankrolling major infrastructure projects like highways and ports.

Analysts in India say Mr. Modi is looking to shore up regional alliances across Asia while also working to deepen economic ties and fixing India's trade imbalance with China. India is expected to forge closer strategic ties with Vietnam and Australia in high-level meetings this month. Mr. Modi will also meet Chinese President Xi Jinping in New Delhi mid-September. The two met at a Brics summit in Brazil in July.

K.C. Singh, a former Indian diplomat and strategic analyst, said that in the coming years, India's relations with China would be characterized by "heightened cooperation and competition, and occasional friction."

Others say among Mr. Modi's biggest foreign policy challenges will be to engage China, Japan and the U.S. more proactively while balancing its ties between the three countries.

India has in the past been reluctant to provoke China or be drawn into any alliance which may be seen as aimed at containing Beijing's rise. Analysts say Mr. Modi's comments show a more muscular and pro-active foreign policy that will both engage China with closer economic ties while counterbalancing its growing power by shoring up regional alliances in South Asia, where China's footprint has grown, and in East Asia.

"How the 21st century turns out will depend on how close India and Japan's relations grow," Mr. Modi said. "For the sake of peace, progress and prosperity in the world, India and Japan have a big responsibility."

Write to Niharika Mandhana at niharika.mandhana@wsj.com and Mitsuru Obe at mitsuru.obe@wsj.com

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