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Japan PM Abe to launch $17-billion Indian bullet train project as ties deepen

Reuters  |  NEW DELHI/TOKYO 

By Tommy Wilkes and Kiyoshi Takenaka

NEW DELHI/TOKYO (Reuters) - Japan's Prime Minister Shinzo will lay the foundation stone for India's first bullet train in Prime Minister Modi's home state this week, in a tightening of ties just days after ended a dangerous military confrontation with

The move by Abe, who starts a two-day visit to on Wednesday, highlights an early lead for in a sector where the Chinese have also been trying to secure a foothold, but without much success.

has made the 500-km- (311-mile-) long high-speed rail link between the financial hub of Mumbai and the industrial city of Ahmedabad in a centrepiece of his efforts to showcase India's ability to build cutting-edge infrastructure.

The leaders will launch the start of work on the line on Thursday, India's railways ministry said in a statement.

"This technology will revolutionize and transform the transport sector," said Railways Minister Piyush Goyal, welcoming the prospects for growth brought by Japan's high-speed "shinkansen" technology.

In Tokyo, a Japanese foreign ministry official told reporters, "We would like to support 'Make in India' as much as possible," referring to Modi's signature policy to lure investors in manufacturing.

"And for that, we want to do what's beyond the Mumbai-Ahmedabad line and achieve economies of scale."

would make "all-out efforts" to complete the line by August 2022, more than a year earlier than planned, the government said this week.

is providing 81 percent of the funding for the 1.08-trillion-rupee ($16.9-billion) project, through a 50-year loan at 0.1 percent annual interest.

TIES BLOSSOMED

Ties between and have blossomed as and increasingly see eye-to-eye in countering growing Chinese assertiveness across Asia.

Japanese investment into has surged in areas ranging from automotives to infrastructure in the remote northeast, making Tokyo its third-largest foreign direct investor.

and are also trying to move forward on a plan for to buy Japanese amphibious aircraft - ShinMaywa Industries' US-2 - in what would be one of Tokyo's first arms transfers since ending a self-imposed embargo.

Tokyo hopes that by gaining a head start on rival exporters of rail technology such as and Germany, its companies will be able to dominate business in one of the most promising markets for high-speed rail equipment.

In 2015, won a contract to assess the feasibility of a high-speed link between and Mumbai, part of a network of more than 10,000 km (6,214 miles) of track wants to set up, but little progress has been made.

Bullet train critics say the funds would be far better spent to modernise India's slow and rickety state-controlled rail system, the world's fourth largest.

But a $15-billion safety overhaul has hit delays as a state steel firm proved unable to fill demand for new rail.

($1=63.9600 Indian rupees)

(Additional reporting by Sanjeev Miglani and Rupam Jain in NEW DELHI; Editing by Clarence Fernandez)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, September 12 2017. 16:16 IST
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