Indian Railways carries 23 million people daily on congested and aging tracks with roots dating back to British colonial rule. Sometimes, trains slow to a walking pace. India’s Prime Minister Modi plans to spend 8.5 trillion rupees ($137 billion) through 2020 on new tracks, including bullet trains and modern stations, as he looks to spur a manufacturing boom.
The project Japan is backing will see the financial capital Mumbai linked by a 508-kilometer (316-mile) high-speed track to the economic hub of Ahmedabad, the largest city in Modi’s home state of Gujarat. Japan has agreed to provide loans to cover up to 81 percent of the cost of one of India’s biggest infrastructure endeavors.
While Japan is happy to divvy up the huge market for urban transit in increasingly traffic-choked cities across Asia, Abe wants to take the lead in high-speed rail, according to Hiroto Izumi, an adviser to the prime minister who has been negotiating the rail deal with India. He said it’s important to get a foothold in Asia’s second-most populous country to outpace China, Japan’s primary competitor.
Japan’s sales pitch revolves around quality: its network boasts a record of zero fatal accidents in more than half-century of history. Izumi said Japan’s relatively high initial costs can be offset by lower repair expenses over a lifespan of decades.