Abe and Modi welcomed joint exercises by their ground, sea and air forces and the start of negotiations toward an acquisition and cross-servicing agreement, or ACSA, which would enable sharing of supplies and ammunition between the two militaries as a way to "enhance the strategic depth of bilateral security and defense cooperation".
At a time when freedom of navigation is becoming a hot-button regional issue, Abe and Modi are expected to confirm their cooperation to realize a "free and open" Indo-Pacific.
"With a view to enhancing financial and economic cooperation, governments of Japan and India welcomed the agreement to conclude a Bilateral Swap Arrangement (BSA) of Dollars 75 billion", said India-Japan Vision Statement issued after the summit-level meeting between the two leaders.
Also on Sunday, in addition to holding talks in what is now their 11 bilateral, the two leaders visited a robot factory.
Japan also extended its support for India's bid to join the Nuclear Suppliers Group, a move that China opposes. The ASCA was also on the agenda a meeting of the Indian national security advisor, Ajit Doval, with his Japanese counterpart, Shotaro Yachi, in New Delhi earlier this month.
Although a proposed "quad" regional defense initiative between democracies Australia, India, Japan and the United State seems stuck in stasis, Japan and India sit on the eastern and western flanks of an expansive China, and are upping defense cooperation.
"A strong India benefits Japan and a strong Japan benefits India", Abe told reporters after he and Modi signed the statement.
"At the delegation level talks, PM @narendramodi & PM @AbeShinzo reviewed developments in bilateral relations & explored new areas of cooperation, focusing on shared vision for peace & prosperity in the Indo-Pacific", tweeted MEA spokesperson Raveesh Kumar.
Concerns about China's expanding influence on the regional economy and US trade policy are also bringing Japan and India closer in their economic ties.
PM Modi, who arrived in Japan on Saturday for his third visit to the country, was hosted by the Japanese PM at the latter's personal villa near Lake Kawaguchi in Yamanashi Prefecture for a private lunch.
The Japanese PM said on Twitter that the opportunity allowed him to talk frankly about India-Japan relations in a relaxed atmosphere.
Abe made a decision to invite Modi to his vacation home in Narusawa after Foreign Ministry officials floated ideas to show hospitality. Japan is funding 80% of the Mumbai-Ahmedabad bullet train project through a soft loan of Rs 79,000 crore at an interest rate of 0.1%, with a tenure stretching over 50 years and a moratorium period of 15 years.