Japanese Prime Minister Yoshihiko Noda arrived in New Delhi on Tuesday, for a visit that is expected to unveil a currency swap deal and reopen talks on a civil nuclear pact. Coming hard on the heels of a trip to China where the main talking points were geopolitical - particularly in the aftermath of the death of North Korean leader Kim Jong-Il - Noda's visit to India will be heavy on business.
"I am determined to further step up the co-operation between the countries in areas like security and economics," Noda told a business function after his arrival.
Terming the relationship between the two countries "complementary", Noda said while Japan has technology and capital, India has a "young workforce as well as abundant demand for infrastructure".
In a meeting Wednesday with Indian counterpart Manmohan Singh, Japan is expected to sign a dollar-swap accord worth up to $10 billion that could help India defend the rupee which has fallen by some 15 percent this year.
"Emerging economies overall are being shaken by the eurozone sovereign debt crisis" as risk aversion rises among foreign investors, said Tsuyoshi Ueno, an economist at Japan's NLI Research Institute.
"A dollar-swap arrangement can help emerging economies as it promises a supply of dollars in an emergency."
Japan, which struck a similar accord with South Korea in October, has seen its exports tumble for two straight months to November, with sales to the key European market floundering as the debt crisis grips.
"India, as much as South Korea, is a very significant market for Japan. Such a dollar swap accord is ultimately aimed at stabilising Japan's own economy," Ueno said. Japan is trying to widen and deepen its trade and financial partnerships as it looks to catch up with export rival South Korea, and after China overtook it as the world's second-largest economy.
Noda's predecessor Naoto Kan met Singh in October last year and stressed the warm ties linking two of Asia's biggest democracies.
"On the economic front, there still remains plenty of potential for beneficial mutual co-operation. Already over 800 Japanese companies have invested in India," Noda said in New Delhi.
Noda and Singh are also expected to discuss a Japanese loan for a mega project to build a freight railway between New Delhi and Mumbai and a key deal on civilian nuclear co-operation.