Tokyo: Japan must regain its historic status as India's most important business partner in Asia, Prime Minister Manmohan Singh told leading Japanese business leaders here Friday as he invited them to 'breathe a new life' into traditional ties between the two countries.

"In the years ahead, we wish to focus on building a much deeper and wider relationship with Japan's business and industry," Manmohan Singh said at a lunch hosted by Japanese apex business chambers in association with their Indian counterparts.

He, however, added that bilateral economic relations'fell far short of the potential' and exhorted Japanese companies to 'reverse this situation'.

"I have been surprised to see Japan lose ground in India during the 1990s to other East Asian and Southeast Asian economies, both in terms of foreign investment flows and trade flows," Manmohan Singh said hours ahead of his meeting with his Japanese counterpart Shinzo Abe when the two will launch negotiations on comprehensive economic cooperation agreement.

"China's trade with India is nearly three times that of India's trade with Japan and Korea's trade with India is almost equal to Japan's role they played in the development of automobile and other industries in India," he said.

"Underlining new opportunities in a youthful, confident and dynamic India", Manmohan Singh underlined that profit prospects of Japanese manufacturing companies was the best in India as compared to other Association of South East Asian Nations (ASEAN) countries.

"More than 90 percent of such companies in India were planning to expand operations in the next one-two years," he said.

"I urge you to weigh the initial problems of entry against the long-term profitability and stability of doing business in India," he said.

Underlining India's rising stature as a knowledge power and IT hub, Manmohan Singh said knowledge-based industries offer tremendous opportunities for partnership between Japan and India.

"India's proven strength in software and Japan's global reputation for quality hardware make us natural partners in high technology industries," he stressed, exhorting Japanese companies to spur their investment in India's infrastructure sector which will require close to $500 billion over the next few years.