Abe, accompanied by a high-level delegation, was received at the airport by Union Minister of State for Finance Jayant Sinha.
In the 9th annual Indo-Japan summit talks tomorrow, Modi and Abe will review implementation of various decisions taken in course of last one year and are likely to focus on enhancing trade and investment between the two Asian economic powers.
"Carrying forward a positive legacy of friendship and cooperation: EAM @SushmaSwaraj calls on Japanese PM @AbeShinzo," External Affairs Ministry Spokesperson Vikas Swarup tweeted.
Welcoming Abe, Modi described him as a "phenomenal leader" and said his trip will further deepen the bilateral relations.
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"Welcome to India @AbeShinzo. Your visit will provide new strength and vigour to India-Japan ties," Modi tweeted.
A number of agreements to expand cooperation in a range of areas are expected to be signed tomorrow after the summit talks which is likely to deliberate on a number of infrastructure projects including the ambitious smart cities initiative of Modi.
According to sources, the sides are working to make forward movement in the proposed nuclear deal.
Modi will accompany Abe during his nearly four-and-a-half-
hour-long visit to Varanasi. Abe will return here in the evening and depart on Sunday.
The Japanese Prime Minister had accompanied Modi during his visit to Kyoto last year.
At the last Summit meeting held in Tokyo last year, the two prime ministers had agreed to elevate the relationship to "Special Strategic and Global Partnership".
During the summit talks last year, Modi and Abe had agreed to enhance defence and strategic cooperation to a new level and also decided to speed up negotiations on civil nuclear deal.
While agreeing on greater defence equipment and technology cooperation, the two sides had decided to expedite discussions on modalities for the sale of Japanese US-2 amphibian aircraft.
Foreign Secretary S Jaishankar had held talks with top Japanese officials in Tokyo last month to finalise agenda and other details of Abe's visit here.
The economic engagement witnessed significant rise after both countries signed a a Comprehensive Economic Partnership Agreement (CEPA) in 2011.