New Delhi/Ahmedabad: Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe on Thursday launched the country's first bullet-train project, making India the first country to buy Japan's iconic 'Shinkansen' bullet-train technology after Taiwan.
Taipei was the first to buy Japan's bullet-train technology.
Tokyo has also agreed to give a loan of Rs 88,000 crore, about 80 percent of the project cost, at a minimal interest of 0.1 per cent for 50 years.
Japan's entry into the Indian bullet-train market marks its hard-fought victory in the midsts of giants like Siemens AG, Bombardier Inc., and Alstom competing in a global market, NDTV reported citing BCC Research.
"The competition between China and Japan, especially in the ASEAN region, has been fairly intense and in India, there will be more competition for other phases of the bullet train project," the channel quoted Jaideep Ghosh, head of the consultancy firm KPMG, as saying.
"Japan has a long history of operating the system without any fatalities. Politics and strategic considerations do play a part, but finally it is a commercial decision," he added.
The bullet train project is PM Modi's ambitious plan to modernize rail infrastructure. Kawasaki Heavy and India's Bharat Heavy Electrics Ltd. will collaborate on the rolling stock, Abe said.
Bharat Heavy reportedly rose to 10.2 percent, the biggest intraday gain in a year.
The government hopes the project would spur manufacturing and employment growth. Besides an estimated 4,000 direct and 20,000 indirect jobs for operations, the project is also expected to create 20,000 construction jobs.
Indian companies are also looking forward to bagging a few contracts.
"We may be getting the technology from Japan, but most of the components for the bullet train will be sourced from India," PM Modi said.
India's first bullet train will run between Mumbai and Ahmedabad, covering a distance of over 500 km. Of the total distance, 21 km will pass through tunnels, of which seven km will be under the sea.
The official target for the completion of the project is 2023.
The bullet train will run at an average speed of 320 km per hour with a maximum speed of 350 km per hour. It is expected to cover the distance in about two hours.
Railway Minister Piyush Goyal has assured that the fare would be "affordable for all".