Tokyo [Japan], October 24 (ANI): Japan's new Prime Minister Sanae Takaichi on Friday said her government will deepen multilateral dialogue with India and other countries such as South Korea, the Philippines and Australia, and advance a 'free and open Indo-Pacific' where China is increasing its military activities, state media reported.

Calling the alliance with the United States the 'cornerstone' of Japan's diplomatic and security policies, Takaichi further emphasized that China is an 'important neighbour' with which Japan needs to foster 'constructive and stable' ties and promote a 'strategic and mutually beneficial' relationship.

In her first policy speech to Japanese Parliament, Diet since being elected as PM, pledged to lift the country's defence spending to 2 per cent of GDP by March, two years ahead of the current target of fiscal 2027, Kyodo reported.

Additionally, she vowed to pursue an aggressive fiscal policy, the official Japanese news agency said.

The 64-year-old Liberal Democratic Leader elected as the country's first woman PM, underscored her government's determination to tackle rising living costs as a 'top priority.'

Takaichi has said that her administration will revise by the end of next year, the country's three key security documents -- its National Defence Strategy (NDS), the Defence Buildup Program (DBP) and National Security Strategy (NSS), which sets a spending target of 2 per cent of GDP, These revisions are expected to clear a path for even higher defence budgets amid what Takaichi said are 'significant changes' in how conflicts are fought.

In an effort to fight inflation, Takaichi said she aims to abolish the provisional gasoline tax rate, which has been in place since 1974, during the ongoing Diet session through December 17, and lift the nontaxable income threshold from the current 1.03 million yen ($6,700) to 1.60 million yen this year.

The government will begin designing a system to introduce a mix of income tax deductions and cash benefits for households, while ditching an unpopular plan to provide 20,000 yen per person, she added.

'I will turn (people's) anxieties about the present and future into hope and build a strong economy,' she said at an extraordinary parliamentary session, highlighting her commitment to 'responsible and proactive fiscal policies' to 'raise incomes, improve consumer sentiment, enhance business profits and boost tax revenue.'

'We need to proactively promote the fundamental strengthening of our nation's defence capabilities' to deal with 'various changes in the security environment' since the three policy papers were drawn up in late 2022,' Takaichi said.

Prime Minister Narendra Modi on Tuesday extended congratulations to Japan's newly elected first woman Prime Minister, Sanae Takaichi. He underscored that the deepening ties between India and Japan are crucial for peace, stability, and prosperity across the Indo-Pacific and beyond.

PM Modi said in a post on X, 'Heartiest congratulations, Sanae Takaichi, on your election as the Prime Minister of Japan. I look forward to working closely with you to further strengthen the India-Japan Special Strategic and Global Partnership. Our deepening ties are vital for peace, stability, and prosperity across the Indo-Pacific and beyond.' (ANI)