This gesture also indicates the planned Japanese gradual shift of 'money bags' from China to India in coming years. In the light of the current controversy about the India-United States civilian nuclear agreement, Japanese perspectives on the issue could further elevate the debate, although Abe was silent on this aspect in his speech which was titled 'Confluence of the Two Seas'.

Although Abe's itinerary in India indicates a bias towards financial-related issues reflected in the 243-member delegation accompanying him, represented by business houses and others, several issues of concern would have been discussed between the two sides.

To start with, Japan [Images] has decided to shift its manufacturing base from China to India, given the problems the Japanese have with China on issues related to increase in labour costs, pitfalls in the investment climate, anti-Japanese riots in Beijing [Images], Shanghai, Guangzhou, Xian and other cities over historical issues.

On the other hand, India offered an attractive destination given the presence of nearly 300 million middle-class consumers, software capabilities and the like, despite some Japanese reassessments following the Hero Honda workers strike in Gurgaon.

Last year, for instance, Japan declared that it would be interested in modernising the Mumbai-Delhi corridor. Japanese investment of nearly $90 billion is to go in this corridor in the coming years. Other infrastructure projects like the completed Delhi Metro, highways, railways, airports, etc are on the cards.

Japan has also invested in infrastructure near Buddhist religious sites, including the Nalanda University project. This was a product of the decision taken by the two countries prime ministers in December 2006 to form a 'Special Economic Partnership Initiative'.

Interestingly, while India-China relations suffered due to the increased Chinese rhetoric over Arunachal Pradesh, the joint statement of the Japanese and Indian prime ministers in December 2006 mentioned promoting Japanese participation in setting up the 3,000 mw Lohit hydroelectric project in Arunachal Pradesh. The two countries hold an annual energy forum and intend to cooperate in setting up 4,000 mw projects and alternate energy resources.

There is the growing political understanding between the two despite differences in the Japanese 'arc of freedom and prosperity' and Indian articulation for an 'arc of advantage and prosperity.' The Japanese idea stems from support to democracies abroad. Although the ministry of external affairs formulated such a foreign policy of promoting democracy in 2001, its support to this idea is lukewarm or even contradictory if one looks at Indian policy towards Myanmar's Aung San Suu Kyi, not to mention about other States in Asia.

Nevertheless, from about Prime Minister Yoshiro Mori's visit to India in 2000, bilateral relations have improved by leaps and bounds. A 'global partnership' agreement was signed then. Prime Ministers Atal Bihari Vajpayee, Junichiro Koizumi [Images] and Manmohan Singh's [Images] visits further elevated the cooperation between 'the largest and most developed democracies of Asia, with a mutual stake in each other's progress and prosperity.'

Coordination between the two in the international field is quite stark -- Japan and Singapore supported Indian candidature in the East Asian Summit and Japan's role in Indian membership in Asia-Europe meeting is considerable, while Japan became an observer of the South Asian Association for Regional Cooperation at its 14^th summit at New Delhi in April. Both are also part of the Group Four countries in their bid for permanent membership in the United National Security Council.

A 'comprehensive security dialogue' commenced between the two countries with focus on military and non-military cooperation. In the military field, both countries decided to 'cooperate closely to ensure the safety and security of international maritime traffic vital for their economic well being as well as for the region.' Defence cooperation between the two included port calls by the navies (of which the Indian Navy conducted one in April this year to Japan), annual defence dialogue, service-to-service cooperation. Next month, the Indian Navy plans to conduct exercises in the Bay of Bengal with Japan, the US, Australia and Singapore.

Although Japan was at the forefront of the criticism against Indian nuclear tests of 1998, it has mellowed down its tone on this issue of late. While Japan argues, given its 'pacifist' Constitution, that India should abide by the nuclear Non-Proliferation Treaty and has concerns on the India-US civilian nuclear deal from the point of view of the fissile materials and IAEA safeguards, it appeared that cooperation between the two countries on this issue is possible.

Japan which has several advanced nuclear power plants and planning to set up an estimated 100 such plants in all, surely would be eyeing the billion of dollars in contracts that India could offer in coming years.

In a related field, cooperation between the two is to be reflected in a 'concerted manner to effectively counter' the spread of ballistic and nuclear weapon or technology proliferation.

Srikanth Kondapalli is an Associate Professor at the Centre for East Asian Studies, Jawaharlal Nehru University, New Delhi