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Japan to build India's first high-speed train

By Reuters in New Delhi | China Daily | Updated: 2015-12-14 08:07

$12 billion in loans will be provided for the railway system

Japan will provide $12 billion of soft loans to build India's first bullet train, the two nations announced during a visit by Japanese Prime Minister Shinzo Abe that also yielded deeper defense ties and a plan for civil nuclear cooperation.

Relations have strengthened recently between Asia's second and third largest economies, and Abe and Indian Prime Minister Narendra Modi enjoy a personal friendship.

The deal is to build a high-speed train line between the financial hub of Mumbai and the city of Ahmedabad. Meanwhile, China is conducting feasibility studies for high speed trains on other parts of India's dilapidated rail network.

"This enterprise will launch a revolution in Indian railways and speed up India's journey into the future. It will become an engine of economic transformation in India," Modi said in a speech.

Japan has offered a "highly concessional loan" at an interest rate of 0.1 percent rate with repayment over 50 years and a moratorium for 15 years, Indian Foreign Secretary S. Jaishankar told a news conference on Saturday.

India will be buying a Japanese high-speed train system, effectively with an export credit of $12 billion.

Under defense deals announced on Saturday, the two sides will share technology, equipment and military information, but the long-awaited sale of Japanese aircraft in a deal worth about $1.1 billion was not concluded. Similarly, while they agreed to work toward cooperation in civil-nuclear technology, they stopped short of signing an agreement, citing outstanding technical and legal differences.

Jaishankar did not cite a timeline for signing the final agreement with Japan.

Japan, the only country to have suffered a nuclear attack, has been demanding additional nonproliferation guarantees from India before it exports nuclear reactors.

India and Japan have been holding talks for 2 years on the purchase by India of US-2 amphibious aircraft made by ShinMaywa Industries, which would be one of Japan's first arms sales since Abe lifted a 50-year ban on weapon exports.

Jaishankar said a purchase of US-2 was discussed in Saturday's meeting and the "matter remains under consideration".

 Japan to build India's first high-speed train

Japan's Prime Minister Shinzo Abe (left) and India's Prime Minister Narendra Modi take a photo together on a mobile phone in Varanasi, India, on the banks of the River Ganges, on Saturday. Prakash Singh / Agence France-Presse

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