Nod for biggest FDI in Indian Railways

Source:  www.business-standard.com

Decks have been cleared for the largest foreign investment in India’s railway sector. The Cabinet has given its nod to set up India’s first 500-km-long bullet train project, with the help of Japanese funds and technology.

Connecting Mumbai to Ahmedabad, the cost will be Rs 98,000 crore. The meeting on Tuesday was chaired by Prime Minister Narendra Modi, according to Reuters. The formal announcement is expected during Japanese Prime Minister Shinzo Abe’s visit that begins Friday.

The development comes as a setback for China, which had been aggressively pitching to partner India in building the planned 10,000-km network of bullet trains. China had recently bagged its first foreign bullet train project in Indonesia, beating Japan by offering easy finance and technical assistance.

The decision comes on the back of the recommendations of a panel headed by NITI Aayog Vice-Chairman Arvind Panagariya, which chose the low-cost funding proposed by Japan International Cooperation Agency (JICA) at less than one per cent interest rate apart from a commitment for technology transfer and local manufacturing for a specified period. More info

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