(Source: www.forbes.com)

As I write this, Indian Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe are more than likely standing in front of a wall of cameras in Ahmedabad laying down the ceremonial first stone of what will become India’s first high-speed rail line.

This new HSR line will extend for 508 kilometers between Mumbai and Ahmedabad, the largest city of Modi’s home province, cutting the travel time down from eight hours to two or three hours, depending on the type of service chosen.

While the specs of this rail line are nothing to be impressed by in China or Japan, in India they are the cutting edge of overland transportation technology. India neither has over 20,000 kilometers of high-speed rail lines like China or is a pioneer of the technology like Japan — this is the first time for all of this here. So announcements like the fact that the train will run at 320 km/h (max speed: 350 km/h), make 70 trips per day, and go through a 27-kilometer long tunnel, of which 7 kilometers will be under the sea, resonate to a far higher degree than in countries who have been doing this for decades.

This is a proud moment that is symbolically meant to usher in a new age for India, being posited as “an occasion to celebrate the advent of the most modern technology in India” and an indication that Indian Railways is obtaining the “most modern technologies like developed countries.” The significance has been upped manyfold due to the fact that the scheduled completion date has been strategically moved up one year to August 15, 2022, so it can be unveiled as part of the ceremonies commemorating the 75th anniversary of India’s Independence.

The total cost of this rail line is estimated to be around $17 billion, with over 80% of it coming from Japan in the form of an extremely friendly loan — which is highlighted by a 0.1% interest rate over a 50-year repayment cycle that’s topped off with a 15-year grace period.

Along with financing the bulk of the project and providing the know-how, Japan, reportedly, also intends to transfer their HSR technology to India. While the first set of rolling stock will come from Japan, the ones following are slated to be manufactured in India, positioning the economic giant of South Asia as a potential developer of HSR technology.

Japan-India relations

Beginning in 2011, India and Japan came together to form a “special strategic and global partnership” with the intent of unleashing the “untapped potential of Asia’s two largest democracies,” which has since grown into a substantial geo-economic relationship in a region that is fast becoming dominated by China. The laying of the first stone of the Mumbai-Ahmedabad Shinkansen line comes just a couple of months after the announcement of the Asia-Africa Growth Corridor, which is a joint effort of Japan and India to bolster transportation infrastructure and development across Asia and Africa, and is more or less a blatant rip-off of China’s Belt and Road Initiative.

China’s reaction

China and Japan are currently facing off on the global forefront of high-speed rail development, competing for contracts to build new HSR lines and supply the rolling stock all over Asia and even into Europe. While Beijing recently notched victories in Laos, Indonesia and Thailand, the Mumbai-Ahmedabad line came as a much-needed win for Tokyo.

However, China has maintain an even-keel sentiment towards the launch of their arch-rival’s Shinkansen line in India, with Chinese Foreign Ministry spokesperson Geng Shuang stating that, “China is pleased to see the infrastructure cooperation among regional countries including on high-speed railway, and we stand ready to promote cooperation with India and other regional countries to promote regional development.”

This is more than likely not mere diplomatic posturing, as China knows that they have two HSR projects in India waiting in the wings. The Mumbai-Ahmedabad line essentially sets the mold for further HSR development in India, and opens the market up wide for China to enter with projects of its own — which already includes proposals to construct HSR lines from Delhi to Nagpur and Delhi to Chennai.

More on Forbes: Small Businesses May Profit Most From China’s Ambitious Belt And Road Projects

While Japan and India appear to have partnered up to rival China’s Belt and Road Initiative with an array of their own similar-looking international development initiatives, Beijing takes a broad, all-encompassing view of its “New Silk Road,” trying to make it out to be a stand-in for pan-Eurasian integration rather than a mere pet project of the upper echelons of the Communist Party of China. Under this view, all advanced transportation projects from East Asia to Europe to Africa fall within the framework of the network, regardless of the particular country carrying them out.

But that did not keep Sushant Mishra, an advisor to Indian Railways, from hitting China with a perhaps uncalled for low blow, claiming that India chose Japan rather than China to build and outfit its first high-speed rail line due to the fact that Japan does not have a history of accidents on their bullet train network. A reference, of course, to the tragic crash of two Chinese high-speed trains near Wenzhou in 2011.

India’s new normal

Modi is a prime minister who is becoming known for his particular brand of big stick politics. Undaunted to initiated drastic policies which obstruct and inconvenience the lives of hundreds of millions of people, Modi has been relentless in his pursuit to push his country into a full rebuild. While his endeavors are not always carried out in the most efficient ways and are often delivered with a blatant disregard for personal sentiment or liberties, the way that they often play out shows that India seems more or less willing to jump on the ride to see where it goes.

The upheaval of demonetization — where Modi suddenly voided 86% of the cash in circulation in an attempt to hit the black market and move millions of people into the digital economy by brute force — showed that such ‘shock doctrines’ can be carried out without destabilizing his grip on the country. If anything, demonetization, whether successful or not, pretty much gave Modi the political carte-blanche to carry out other large-scale modernization initiatives — such as constructing five additional high-speed rail lines on top of Mumbai-Ahmedabad.

As Modi paints the outside of his house and carts in some large screen TVs to try to catch up with the Joneses, India remains a relatively impoverished place, recently ranking as the 64th poorest country in the world and coming in 60 out 79 countries on the World Economic Forum’s Inclusive Development Index (significantly lower than even neighboring Pakistan and Bangladesh). While the promotional material for the Mumbai-Ahmedabad high-speed rail line state that it will serve 36,000 passengers each day, it has to be questioned where they are going to come from. Are there really that many people looking to travel between these destinations at a price that’s proposed to be 50% higher than India’s current most expensive train just to save five or six hours of travel time? Also, who would choose to take this train when they can fly for the same price and cut the travel time down to an hour?

However, I must check my criticisms here: such modernization projects are done to lay the groundwork for the future, not to comply with the economic fundamentals of today. India aims to become a high-speed rail powerhouse, upgrading its aging system of conventional trains, and the Mumbai-Ahmedabad line is the first steps towards this ambition.

More Info: www.forbes.com

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