Seeking to step up bilateral cooperation, Japan has set up a 'Make-in-India' fund of 1.5 trillion yen (approximately Rs 83,000 crore), while India promised to devise a special package of incentives for attracting investments in 'Japan Industrial Townships'.

Prime Minister Narendra Modi welcomed the 'Japan-India Make-in-India Special Finance Facility' of up to 1.5 trillion yen by Nippon Export and Investment Insurance (NEXI) and Japan Bank for International Cooperation (JBIC), according to a joint statement issued after the meeting between Modi and Japanese Prime Minister Shinzo Abe on Saturday.

This agreement aims at promoting direct investment from Japan to India and to support their business activities with counterparts in India, including development of necessary infrastructure, and to help materialise 'Make-in-India', the statement noted.

A strong economic partnership between India & Japan is vital. Spoke about economic ties at Business Leaders Forum. https://t.co/Ub7bXvzZjK — Narendra Modi (@narendramodi) December 12, 2015

It said that Prime Minister Abe expressed his expectation on further enhancement of reform measures including in the financial sector."The two prime ministers decided to deepen mutual cooperation regarding the Make-in-India policy," the statement notes.

The two sides also reaffirmed the "intention to develop 'Japan Industrial Townships (JITs)', with investment incentive for companies that would not be lower than under the prevailing policy framework such as Special Economic Zone (SEZ), and National Investment and Manufacturing Zone," it added.

"Moreover, both sides will work toward evolving special packages for attracting Japanese investment in the JIT in India," the statement said.

Both countries also welcomed the progress in the flagship projects such as the Western Dedicated Freight Corridor and reaffirmed the determination to expedite the Delhi-Mumbai Industrial Corridor (DMIC) projects.

India and Japan further concurred to take the Chennai-Bengaluru Industrial Corridor (CBIC) project to the next stage of concrete implementation by utilising Official Development Assistance (ODA) loan schemes and other facility measures.

"Indian side expressed a hope to attract $5.5 billion (approximately Rs 36,729 crore) of investment and other support," it said.

Recognising the important role played by Japan's ODA, the two sides hoped that the total commitment of Japanese ODA yen loan to India in 2015-16 may reach around 400 billion yen (approximately Rs 2,240 crore) , the highest ever provided to India, it said.

Prime Minister Abe expressed Japan's intention to provide ODA loans for the improvement of road network connectivity in North-Eastern states of India, the peripheral ring road surrounding Bengaluru, and the horticulture irrigation in Jharkhand.

Seeking the synergy between India's Act East policy and Japan's Partnership for Quality Infrastructure, the two prime ministers decided to develop and strengthen reliable, sustainable and resilient infrastructures that augment connectivity within India and between India and other countries in the region.

The two sides also pledged to advance industrial networks and regional value chains with open, fair and transparent business environment in the region, the joint statement said. India and Japan stressed the need for further actions for investing in the future.

Prime Minister Abe also expressed his intention to support India's efforts by sharing its advanced skills and technologies and through active mobilisation of Japanese public and private sector involvement, including Official Development Assistance (ODA).

"The two prime ministers welcomed the steady progress to realise 3.5 trillion yen (approximately Rs 1.96 trillion) of public and private financing to India in five years under the 'Japan-India Investment Promotion Partnership' announced during the last annual summit meeting," it added.

Modi briefed the Japanese Prime Minister on his agenda of reforms to make India the investment destination with the most business-friendly environment. "Prime Minister Modi reaffirmed his determination to improve the business environment in India," it said.

The two sides expressed hope that investment-related assistance, guidance and support extended by Japan Plus will become even more effective and efficient through enhancing coordination with stakeholders.

Both the sides also stressed on the importance of expansion in the two-way investment, it said, adding Japan "expressed the intention of establishing a new mechanism, 'Japan-India IoT Investment Initiative' to promote investment in Internet of Things (IoT) related area".

The two sides have recognised the importance of close collaboration in the energy sector through measures such as use of environmentally friendly coal-fired power generation technology, and Clean Coal Technology.

The two sides also shared their intention to raise the level of their ambition through the establishment of joint research laboratories; enhanced exchanges between young scientists and those under 'Japan-Asia Youth Exchange Program in Science'; the establishment of joint research centres in India in the field of Information and Communications Technology (ICT).

Further, it added that both the countries will further advance their cooperation by providing Indian trainees with opportunities to acquire industrial skills in Japan including under the Technical Intern Training Program.