Japan bullet train deal to crown India sales package

TOKYO (AFP) - India is seen set to use Japanese bullet train technology for a high-speed connection between Mumbai and Ahmedabad, a report said Wednesday, the centrepiece of a huge package of infrastructure sales.

Prime Minister Shinzo Abe and his Indian counterpart Manmohan Singh will issue a joint statement at a summit later in the day giving details on a feasibility study for the railway, the Nikkei newspaper said.

Abe is to offer a sweetener in the form of 101.7 billion yen (S$1.26 billion) in yen-based loans to India, the Nikkei said, as Tokyo fights off competition from nations such as France, which has the TGV high-speed rail network.

Japan under Abe is embarking on a renewed drive to sell roads, rail and power stations to emerging nations, including India, in a bid to offset lassitude in the domestic economy that has left it treading water.

Earlier this month Abe pledged he would travel the world on behalf of Japan Inc and said he wanted to treble sales of Japan's well-respected infrastructure projects to 30 trillion yen a year.

The Mumbai-Ahmedabad rail line would stretch 500 kilometres at a cost of up to one trillion yen, the Nikkei said, adding the two governments plan to finish technological reviews and costings by March 2014.

Abe was also expected to offer around 17.7 billion yen to India to build a conference hall and other facilities at the Indian Institute of Technology in Hyderabad, along with around 13 billion yen for the Tamil Nadu state government, the Nikkei said.

The pledges will come on top of a March offer of a 71 billion yen loan towards the construction of an underground rail network in Mumbai.

Japanese media have said the two sides will agree on drafting a master plan for new infrastructure in southern India, which could see Japanese know-how used to build a power grid, roads, railways and ports around Bangalore and Chennai.

The sales boom comes as the two countries - both democracies - eye the rise of China with increasing unease as Beijing presses territorial claims with growing insistence.

Singh on Tuesday called for the shoring up of military and security ties, Kyodo News said, stressing the commonalities between Tokyo and Delhi.

"We should intensify our political dialogue and expand our strategic consultations on... issues of mutual interest," Singh said in a speech, adding that defence and security dialogue, military exercises and defence technology collaboration should also grow between the two countries, according to Kyodo.

Singh stressed that Japan is the only country with which India has held a "two-plus-two" meeting of foreign and defence ministers, Kyodo said.

Media reports earlier this week said Japan was expected to sell amphibious planes to India in what would be the first sale of hardware used by the Japanese military since a weapons export ban was imposed in the 1960s.