Japan, India agree on $12 billion deal

Japan, India agree on $12 billion deal including nuclear energy, railway construction and aircraft sale

Photo by: Reuters
Photo by: Reuters

Japan's Prime Minister Shinzo Abe (L) and his Indian counterpart Narendra Modi shares a moment during a signing of agreement at Hyderabad House in New Delhi, India on December 12, 2015

Japanese Prime Minister Shinzo Abe met with India’s Prime Minister Narendra Modi on Saturday in New Delhi to advance bilateral relations between the two countries, in which Japan agreed to give $12 billion in soft loans to build India’s first express train.

The two countries will also deep their defence relations and a plan for civil nuclear cooperation.

Both nationalist leaders are strengthening their bilateral relations to balance the People’s Republic of China’s domination in Asia.

Deals between Japan and India- which are amoung the top 5 economic powers in Asia- aim to build a bullet train line between financial hub Mumbai and the city of Ahmedabad, to come ahead of China, which is analysing India’s high speed trains in other areas of India’s crumbing railway lines.

"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.

Indian Foreign Secretary Subrahmanyam Jaishankar told a news conference that Japan offered a “highly concessional loan” with a 0.1 percent interest rate and repayment over 50 years along with moratorium for 15 years.

Along with sharing technology, equipment and military information, there were also talks on Japan selling an aircraft worth about $1.1 billion, however it was not concluded.

Since Japan is the only country to endure a nuclear attack, it demands increased non-proliferation assurance from India, prior to exporting nuclear reactors.

The nuclear energy deal between the two countries, in which the United States opened the way for, comes despite its atomic bomb programme and shunning of the global Non-Proliferation Treaty (NPT).

India’s GE-Hitachi, Toshiba's Westinghouse Electric Company also will have benefit from deals.

Jaishankar has not release specific information on a time frame for the final agreement with Japan.

"The memorandum we signed on civil nuclear energy cooperation is more than just an agreement for commerce and clean energy, it is a shining symbol of a new level of mutual confidence and strategic partnership in the cause of peaceful and secure world," Modi said.

"I know the significance of this decision for Japan and I assure you that India deeply respects that decision and will honour our shared commitment," Modi added.

Both countries have been holding talks for two years to buy the Japanese US-2 amphibious aircraft made by ShinMaywa Industries and it would be Japan’s first arms sale since Abe lifted a 50-year ban on weapon exports, which Jaishankar said is a matter that "remains under consideration."

TRTWorld and agencies