"The whole world accepts that the 21st century will belong to Asia. But I have a question. How should the 21st century be We have to give an answer to this. It will depend on how deep and progressive our relationship (between India and Japan) is," he said addressing business leaders of India and Japan here.
"We have to decide if we want to have 'vikas vaad' (development) or 'vistar vaad' (expansionism) which leads to disintegration. Those who follow the path of Buddha and have faith on 'vikas vaad', they develop. But we see, those having ideas of the 18th century, engage in encroachments and enter seas (of others)," he said.
He did not name any country but the comments may be seen as targeting China which is engaged in territorial disputes with a number of its neighbours, including India, Japan and some others including Vietnam.
India and China share over 4,000 km of Line of Actual Control. China claims approximately 90,000 sq km of territory in Arunachal Pradesh besides 38,000 sq km in Jammu & Kashmir.
Also, relations between Japan and China have been tense over island disputes in the East China Sea and exploitation of undersea gas deposits in the area.
China claims 90 per cent of the South China Sea, believed to contain oil and gas deposits. Brunei, Malaysia, Vietnam, the Philippines and Taiwan also lay claim to parts of the sea.
Modi underlined the need for closer and deeper cooperation between India and Japan to champion the cause of global "vikas vaad (development) instead of vistar vaad (expansionism)".
He underlined that India and Japan should work for promotion of peace and progress to address the needs of the humanity.
"India and Japan have a big responsibility. It is the responsibility of not only the governments and leaders but also of the businesses to see which way the world goes."
Viewing business fraternity as a "big driving force" for peace and progress, he said said India wants to play a role for benefit of humanity.