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Japanese Prime Minister Shinzo Abe arrives in Delhi today for a two-day visit, during which the formal announcement of India’s first bullet train deal is expected.
The Indian Cabinet has given its nod to set up India 's first 500-km-long bullet train project, which will be the largest foreign investment in Indian railways, with the help of Japanese funds and technology.
Japan International Cooperation Agency (JICA), which had offered to fund 80% of the estimated Rs 98,000 crore cost of the Mumbai-Ahmedabad bullet train project, had submitted a feasibility study in July for the high-speed corridor.
The Japanese loan of more than Rs 78,000 crore will come with a 50-year tenure and less than 1% cent interest rate, along with a moratorium of 15 years.
The deal is the result of an agreement, signed during Modi’s five-day visit to Japan in September last year, between both countries to develop a bullet train system for India . Modi had described his trip as “very successful”.
Here is a quick rundown of major agreements between India and Japan :
1. Japan has committed to doubling its current investment in India to $35 billion over the next five years.
2. Japan has pledged $500 million towards the Public-Private Partnership Infrastructure Financing Project to the India Infrastructure Finance Company Limited (IIFCL)
3. During last year’s visit, Modi had inked a Memorandum of Understanding (MoU) between the Ministry of New and Renewable Energy of India and the Japan Bank for International Cooperation (JBIC) in the field of new and renewable energy.
4. Both countries agreed to work towards industrial infrastructure development with the creation of Smart Community projects in six Indian states as part of the Delhi Mumbai Industrial Corridor (DMIC) Project.
5. Japan has agreed to ease foreign end-user entities list for India. As a starter, it has removed 6 Indian space defence-related entities from its restricted list.
6. Japan has agreed to work with India on creating smart cities, starting with the Kyoto-Varanasi project.
7. Earlier this year, the Japanese government initiated further steps to help develop infrastructure in India. According to The Economic Times , Japan has identified 11 sites to set up industrial townships in India. The identified sites include Tumkur in Karnataka, Ghilot in Rajasthan, Mandal in Gujarat and Supa in Maharashtra.
8. Japanese investments in India have grown at a fast clip. FDI inflow amounted to $618 million during June-September, 2014 against $273 million for the corresponding period in 2013. A survey conducted by Japan Bank for International Cooperation (JBIC) this year ranked India as the top destination for future investments by 1,000 Japanese manufacturing companies.
9. According to a Reuters report in June this year, Japan's SoftBank Corp, together with Bharti Enterprises and Taiwan's Foxconn, committed to investing an estimated $20 billion in solar projects in India.
10. Japan has agreed to participate in Indian Railways’ $140 billion investment plan and modernise 400 railway stations across the country.
