Japan and India agree bullet train, nuclear deals

India selected Japan to help build its first high-speed rail link in a coup for Prime Minister Shinzo Abe and a defeat for China, which also had bid for the signature project.

Prime Minister Narendra Modi welcomed the “Japan-India Make-in-India Special Finance Facility” of up to 1.5 trillion yen by Nippon Export and Investment Insurance and Japan Bank for International Cooperation, a joint statement issued after the meeting between Modi and Japanese Prime Minister Shinzo Abe said today.

Japan will provide $12 billion to build a bullet train that will run between the western cities of Mumbai and Ahmedabad. Bullet train between the two cities will cut travel time on the 505 kilometre route from eight hours to around three.

Japan and India vowed to deepen their economic and security relations in an agreement that commits the countries to bilateral nuclear cooperation and the construction of a high-speed railway system during summit talks on Saturday, according to a joint statement.

The two sides also inked agreements – one concerning the Transfer of Defence Equipment and Technology and another related to Security Measures for Protection of Classified Military Information.

Similarly, while they agreed to work towards cooperation in civil-nuclear technology, they stopped short of signing an agreement, citing outstanding technical and legal differences.

“I know the significance of this decision for Japan and assure you that India deeply respects this decision and will honor our shared commitment”, Modi said. “If they (Japan) were not convinced, would they have done the (nuclear) deal?” he asked.

Among the global issues, Modi and Abe discussed North Korea’s contentious nuclear programme and expressed concern over that country’s continued development of its nuclear weapons and ballistic missile programmes, including its uranium enrichment activities. Japan has also pledged Dollars 5 billion as part of its Overseas Development Assistance to India.

Modi briefed the Japanese Prime Minister on his agenda of reforms to make India the investment destination with the most business-friendly environment.

After the talks, Modi also announced that “Recognising our special relationship, India will extend ‘visa on arrival to all Japanese citizens from 1st March 2016.”. Foreign secretary S Jaishankar said Japan was also now going to participate regularly in India-US Malabar naval exercise.

He said that Japan does not see India moving away from its self-imposed moratorium on nuclear tests and worldwide commitments. In a joint statement the two prime ministers mentioned the South China Sea and “called upon all states to avoid unilateral actions that could lead to tensions in the region”.

Japan is a major player in the nuclear energy market and an atomic deal with it will also make it easier for US-based nuclear plant makers Westinghouse Electric Corporation and GE Energy Inc to set up atomic plants in India as both these conglomerates have Japanese investments. Under Abe, Japan has shifted away from 70 years of post-war pacifism, and the country recently lifted a decades-old ban on arms exports. Economies of both the countries are showing signs of improvement amidst global slowdown, he said, adding, “Japan economic analysis which came yesterday was very encouraging”.

Modi and Abe reached Varanasi together on Saturday evening.

Japan also welcomed India’s intensified engagement with export control regimes.

Further, it added that both the countries will further advance their cooperation by providing Indian trainees with opportunities to acquire industrial skills in Japan including under the Technical Intern Training Program. Japan’s trade with India is about 5 percent of its commerce with China, and less than 25 percent of India-China trade.

The two leaders agreed to push for more cooperation with other regional powers, saying trilateral discussions with the USA and Australia contribute to a more “stable and transparent” architecture in the Indo-Pacific region.