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A cash crisis has paralysed India since Prime Minister Modi shocked the nation with the withdrawal of large denomination notes last week.
India and Pakistan have in the past few weeks blamed each other for escalation along LOC and of "unprovoked aggression".
Modi has insisted that demonetization is an essential move to tackle graft and crack down on black money.
Modi and Abe signed bilateral agreements, most important of which is the deal to export nuclear power technology to India.
Police are also investigating the legal status of the factory, which is located in a highly congested residential area.
Prime Minister Modi wants to break the grip of corruption and "black" money.
China says it is ready to work with India on border defense.
British Prime Minister Theresa May has reached India for a three-day visit.
The city was shrouded in thick sepia-toned air over the past few days.
India and Russia also announced a deal to pave the way for a group led by Russian oil giant Rosneft to acquire India's Essar Oil.