"In Japan, the political mood towards India is remarkably friendly on the economic front..," said a recent editorial on the matter in The Hindu.

"..India is behind only Japan and China in Asia in terms of their macro-level gross domestic products and related indices. No less significantly, Tokyo does not have an economic pact with either its long-standing ally, the U.S., or with an immediate neighbor like the ascendant China," the article said.

With trade between the two nations almost guaranteed to flow more freely, India and Japan are looking to strike a civil nuclear cooperation pact, much to the chagrin of survivors of the 1945 U.S. atomic bombings of Hiroshima and Nagasaki in World War II and compounded by the fact that India has developed nuclear weapons without signing the Nuclear Non-Proliferation Treaty.

New Delhi had faced a nuclear trade ban since conducting its first atomic test in 1974 and refusing to sign non-proliferation accords. It began emerging from nuclear isolation in 2008 when it signed a civil nuclear cooperation agreement with the U.S. The 45- nation Nuclear Suppliers Group then lifted a three-decade global ban on nuclear trade with India.

"On the one hand a civilian nuclear cooperation deal with India will be a major boost to Japan's economy as demand in India for nuclear power generation technology and materials is high, but India hasn't signed the Nuclear Non-Proliferation Treaty and has a less than stellar nuclear history," Tetsuyo Shimura, director of affairs at the Asian Exchange Foundation, told Xinhua.

"New Delhi perhaps needs to do more than just announce a moratorium on further nuclear testing before Tokyo agrees to conclude a civil energy deal," he said.

According to an informed Japanese official, "The Japan-India civil nuclear talks "will continue." It is, therefore, possible that Japan will not risk writing off the new "importance" of India in a hurry, especially as long as the current fluidity in global affairs persists.

While an India-Japan nuclear agreement is crucial for international nuclear power companies to do business with India -- with Japanese companies gunning to set up plants in India -- Kan must tread carefully as he faces a potential backlash from his own people and risks further antagonizing his already angsty neighbors.

"Japan has been the only country to suffer a nuclear attack and as such lauds non-proliferation. India must be sensitive to this and the very fact that Kan, during their talks, warned Singh of " consequences," should India test a nuclear weapon, suggests Tokyo needs to think long and hard about how to play this one," Shimura said.