There was realistically no chance of such an alliance happening. To start with, the Imperial Japanese Army was extremely nationalistic, racist, and (if you believe the IJN commentary) not all-to-bright. They would not have seen the Chinese or Indians as anything but their inferiors and would have treated them that way.
Chang was not about to hand over a large chunk of China to the Japanese either. He definitely would not have done so on nothing but their promise to supply him arms and help fight Mao's communist faction. Chang had more to gain by staying with the US and Britain both of whom (particularly the US) were suppling him arms. This was a major reason the Japanese invaded Burma; to cut the supply routes the US and Britain were using to move war material into China.
While the Communists were a definite problem for the Nationalists, the Japanese were a bigger threat than either was to the other. Either throwing in with the Japanese meant losing foreign support for their side while simultaneously gaining nothing from the Japanese militarily (see the Manchuko Army Japan formed for clear evidence of this) as the Japanese had little or nothing to spare. Politically, siding with the Japanese only legitimizes their hold on much of China which again would have been unacceptable.
For the Soviets, the situation doesn't change one bit regardless of the line up. The Japanese, with or without Chinese support, lack the means to engage in a full scale war with the Soviets. The outcome is always the same: Japan loses badly.
It is as simple as the Japanese being a seapower cannot afford to be a land power. Taking on a land power in a continential war is suicide for the Japanese. Even versus the marginal capabilities of China stretched the Japanese to the breaking point in fighting a potential land power.
India would have proven even more difficult to deal with than China. They too would have realized that there was nothing to gain from a Japanese alliance.
A far better course of action for the Japanese would have been to try and negotiate a settlement with Chaing and the Nationalists to end their war in China, even ceeding some territory back to the Nationalists if necessary to achieve it.
Avoiding war with the Soviets and US should have been a Japanese imperative. Instead of fighting for a colonial expansion they could have held on to Manchuko and worked towards greater economic parity with the Soviets and US with the possibility of a military operation later if necessary rather than rushing to war as they did.

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Truth is stranger than bullshit!