Despite divergences on non-proliferation issues, India and Japan have decided to push ahead with the nuclear cooperation at their annual summit on Wednesday, besides charting out ways to firm up the ties in a host of areas, including defence and infrastructure development.
To facilitate Japanese business and give weakening rupee a breather, Japan has agreed to extend a $15 billion currency swap line to India.
"As part of our energy cooperation, we reviewed the ongoing discussions on furthering civil nuclear cooperation between our countries. These are moving in the right direction," Prime Minister Manmohan Singh said after meeting his Japanese counterpart Yoshihiko Noda.
"The two prime ministers welcomed the progress made to date in negotiations between India and Japan on an Agreement for Cooperation in the Peaceful Uses of Nuclear Energy, and directed their negotiators to exert further efforts towards a conclusion of the agreement, having due regard to each side's relevant interests...," said the joint statement issued after the meeting.
However, Japanese prime minister wanted India to be part of the Comprehensive Test Ban Treaty (CTBT) that New Delhi finds discriminatory. India and Japan held three rounds of talks for a nuclear deal. The talks didn't happen after the Fukushima nuclear accident in Japan.
"Prime Minister Noda stressed the importance of bringing into force the Comprehensive Nuclear-Test-Ban Treaty (CTBT) at an early date. Prime Minister Singh reiterated India's commitment to a unilateral and voluntary moratorium on nuclear explosive testing," said the joint statement.
"Japan at least wants us to join the International Monitoring System (IMS) under the CTBT. That's one step closer to be part of the CTBT. That's not a position that we would like to have," said a senior Indian official.
The $15 billion currency swap line expected to support the Indian Rupee, which continues to weaken.
The arrangement comes at a time when Europe's deepening debt crisis threatens to curtail many Asian countries prospects in getting dollar funding.
Defence and security ties figured prominently in talks and they decided to expand their cooperation in maritime security and anti-piracy operations.