Japan and India agreed Monday to upgrade diplomatic and military ties, with Tokyo also offering low-interest loans as the two countries seek closer ties to balance China's weight in the region.

The plans were announced as India's Prime Minister Narendra Modi rounded out a three-day trip to Tokyo for talks with his Japanese counterpart Shinzo Abe, senior ministers, and local business leaders.

Experts said Abe, who last week became the first Japanese prime minister to visit Beijing since 2011, was performing a delicate balancing act -- working to improve ties with China while keeping relations with India on a strong footing.

"Strong relations between Japan and India are the foundation that will sustain the region," Abe said in a joint press statement with Modi after talks in Tokyo.

He said the two sides would launch a new ministerial-level security dialogue and strengthen exchanges between army and naval forces, and he offered low-interest loans worth 316.4 billion yen ($2.8 billion).

"Japan and India will take the lead for stability and prosperity in the region," he said.

Modi said the investment would create around 30,000 new jobs in India, and that the two leaders had pledged "to push our cooperation at an uninterrupted speed."

Though neither leader mentioned China by name, experts said the talks come against the backdrop of expanding Chinese influence in the region.

"The 21st century is a century of Asia," Modi said in remarks translated into Japanese.

"There are questions -- who will predominate and what should be done? It is clear that there won't be a century of Asia without cooperation between India and Japan."

"Prime Minister Abe is performing a balancing act between China and India," said Takashi Kawakami, professor of international politics at Takushoku University in Tokyo.

"He met President Xi Jinping at a time when China and the US are in confrontation, and he is now meeting Modi to seal cooperation among Japan, India and the US on a free and open Indo-Pacific, against China," Kawakami told AFP.

Modi and Abe have met regularly in recent years, with Japan last year inaugurating India's first bullet train project -- a $19 billion project using Japanese trains and technology.

It is meant to link Ahmedabad to India's financial capital Mumbai and is scheduled for completion by the end of 2023.

The two leaders have reportedly become friends, and Modi became the first foreign leader to receive an invitation to Abe's holiday home in Yamanashi near Mount Fuji, where the pair held informal talks on Sunday.

Photos posted by the pair on the respective Twitter accounts showed them chatting in front of a fireplace at the logcabin, wearing striped slippers and smiling.

"I am truly honoured by this gesture. PM Abe also taught me the Japanese way of eating food using chopsticks!" Modi tweeted.

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