Japan has promised to provide new investment dollars and technology to improve India's infrastructure. Japanese Prime Minister Yukio Hatoyama promised the aid during a recent visit to India. The investment is targeted at two key infrastructure projects in Western India.
Two agreements signed between India and Japan this week will help finance a project to build a 1,500 kilometer-long industrial corridor between India's financial hub, Mumbai, and the capital, New Delhi.
The pacts were concluded during Japanese Prime Minister Yukio Hatoyama's recent visit to New Delhi.
Japan is a key investor in the Delhi-Mumbai industrial corridor project, which India plans to complete by 2016. The project involves the development of special economic zones, as well as sea ports and airports in six Indian states.
Indian officials say Japan will assist in the development of modern townships along the corridor. Japan is expected to invest about 10 billion dollars in the project.
The two sides have also decided to begin this year another project that has been planned with Japanese financial aid - a dedicated rail freight corridor between Mumbai and New Delhi.
Indian Prime Minister Manmohan Singh has underlined the importance of the two ambitious urban infrastructure projects.
"Both these projects will have a significant positive impact on the Indian economy and on the scale of our economic cooperation with Japan," said Mr. Singh.
Japanese Prime Minister Yukio Hatoyama said Tokyo would like to invest more in urban infrastructure because it will benefit both sides.
The Japanese leader said he would like to bring the technology involved in building bullet trains to the Indian railways. He pointed out that bullet trains are extremely safe, and there has been no accident involving them.
India has been seeking international assistance to improve its roads, ports, and railways, amid widespread complaints from Indian and foreign investors of a lack of adequate infrastructure in the country.
Japan is India's sixth largest foreign investor. Last year it invested more than five billion dollars in the South Asian nation. The number of Japanese companies operating in India has nearly doubled in five years to 600.