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India and Japan took their biggest steps yet to deepen strategic ties, and it’s mostly thanks to China.

Indian Prime Minister Narendra Modi and Japanese counterpart Shinzo Abe reached a slew of agreements in New Delhi over the weekend that underscore how their personal chemistry is translating into ever-warmer economic, military and strategic ties. The steps are designed to ensure that the rise of China, the top trading partner for both nations, doesn’t come at the expense of smaller economies in the region.

Narendra Modi and Shinzo Abe Photographer: Money Sharma/AFP/Getty Images

“Modi and Abe are telegraphing a striking message: We’re taking this relationship to the next level, even at the risk of roiling China,” said Michael Kugelman, senior associate at the Woodrow Wilson Center in Washington. “As close as these two countries are, they had held off to an extent in order not to overly alarm China."

Modi and Abe, whose personal ties date back to 2007, are both seen as conservative nationalists seeking to overhaul their economies and strengthen their militaries. Japan offers deep pockets, and India presents a growing market with a population set to overtake China as the world’s largest in 2022.

$60 Billion

Abe has shifted Japan away from seven decades of post-war pacifism to empower its armed forces, while Modi is investing more than $60 billion in India’s navy to deter China from establishing a foothold in the Indian Ocean. Those actions support U.S. goals to rally Asian nations against China’s efforts to control more of the South China Sea, which carries about a third of global trade.

“I cannot think of a strategic partnership that can exercise a more profound influence on shaping the course of Asia and our interlinked ocean regions more than ours," Modi said at a joint news conference with Abe on Saturday. “In a world of intense international engagements, few visits are truly historic or change the course of a relationship. Your visit, Mr. Prime Minister, is one."

Nuclear, Rails

Among the highlights of Abe’s three-day visit that ended on Sunday:

* A $15 billion deal for Japan to help build India’s first high-speed rail link

* A breakthrough on nuclear energy cooperation that paves the way for companies such as Westinghouse Electric Co. and General Electric Co. to sell equipment to India

* 1.5 trillion yen ($12.4 billion) in Japanese financing and export insurance to spur investment in India

* Defense agreements aimed at containing China’s expansion in regional waters

* Japanese funds to build roads in India’s northeast, where one state is claimed by China

The deals are bringing India, which formally avoids security alliances, further into the U.S. military orbit.

Japan will join India and the U.S. as a regular member in the biannual Malabar naval exercises to “help create stronger capabilities to deal with maritime challenges in the Indo-Pacific region," the two leaders said in a joint statement. The three nations are already becoming “interoperable" after Japan joined as a guest for their most complex naval exercises in October, U.S. Ambassador to India Richard Verma said last week.

China Trade

Next year, India and Japan will hold a second round of trilateral diplomatic talks with Australia, another U.S. ally. Modi and Abe also signed pacts to share classified intelligence and pave the way for a long-pending deal to export Japan’s US-2 amphibious aircraft to India.

While neither Japan nor India has claims in the South China Sea, they both have other territorial disputes with Asia’s biggest economy. China has sparred with Japan over islands in the East China Sea, and India has expressed concern over Chinese moves to send submarines to Sri Lanka and build a port for its arch-rival Pakistan.

Modi and Abe called for a “peaceful, open, equitable, stable and rule-based order in the Indo-Pacific region and beyond" in their joint statement.

To be sure, both India and Japan remain heavily reliant on China for economic growth. Japan’s trade with India is about 5 percent of its commerce with China, and less than a quarter of India-China trade. China’s foreign ministry on Sunday didn’t reply to a fax requesting comment on the growing economic and military ties between India and Japan.

“All countries have the right to make their own decisions about who they want to cooperate with," Chinese Foreign Ministry Spokeswoman Hua Chunying told reporters in Beijing on Dec. 9 when asked about the pending rail deal between Japan and India.

‘Defining Relationship’

There’s more coming that could upset China.

Japan agreed to help finance infrastructure projects in India, including roads in its northeastern states, one of which is the disputed area of Arunachal Pradesh. In recent months, India has pushed ahead with plans to build a $6 billion highway and populate the remote region it has neglected since fighting a war over it with China five decades ago.

The biggest surprise was a breakthrough on a nuclear cooperation agreement under negotiation since 2010. Japan -- the only country to have suffered an atomic bomb -- had been holding out for tougher safeguards from India, which hasn’t signed the Nuclear Nonproliferation Treaty.

“The key part has been done," Foreign Secretary S. Jaishankar said. Japan’s concerns have been addressed by India’s self-imposed moratorium on nuclear tests, though Tokyo would reconsider the pact if the South Asian nation explodes an atomic device, Japanese Foreign Ministry spokesman Yasuhisa Kawamura told reporters in New Delhi.

While “technical details" still need to be finalized and Japan’s parliament would have to endorse the pact, Abe told Modi that even getting this far wouldn’t have been possible if two other leaders had been in power, according to Kawamura.

“India-Japan working together is an idea whose time has finally come," said Aparna Pande, the Washington-based director of Hudson Institute’s South Asia initiative. “The relationship has the potential to become ‘the’ defining relationship of this century."

— With assistance by Alfred Cang

( Updates with comment from joint statement in 13th paragraph. )