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Bullet Train, Nuclear Deal Top Japan's Abe Agenda in India

Japanese Prime Minister Shinzo Abe (r) gets down from the plane as he arrives in New Delhi, India, Dec. 11, 2015. Abe is on a three-day visit to India.
Japanese Prime Minister Shinzo Abe (r) gets down from the plane as he arrives in New Delhi, India, Dec. 11, 2015. Abe is on a three-day visit to India.

Prime Minister Narendra Modi hopes the visit this weekend by Shinzo Abe will be a major step in transforming India into an economic powerhouse with Japan's help in building bullet trains, "smart cities" and accessing nuclear technology.

India and Japan are set to sign a $15 billion agreement for a high-speed train linking the Indian financial hub of Mumbai with Ahmadabad, the commercial capital of Modi's home state, Gujarat. The train would cut travel time on the 505 kilometer (315 mile) route from eight hours to two.

For Japan, still smarting from losing out to China over a similar agreement in Indonesia, firming up the Indian deal was crucial. Tokyo has promised technical and financial support to New Delhi for the project, including a low-interest 50-year Japanese loan.

The deal would benefit Japanese companies with contracts for manufacturing rail cars, tracks and operating systems.

Other major priorities during Prime Minister Abe's three-day visit include discussions on a civil nuclear agreement, military purchases for India's armed forces and Japanese aid to upgrade India's creaking infrastructure.

As India tries to balance its economic growth with sustainable development, New Delhi is keen to increase its use of nuclear power but the two sides are still some distance away from a nuclear deal.

Analysts said that Japan, which has long been seen as a pacifist nation and a firm supporter of nuclear nonproliferation, will have strong reservations about signing a civil nuclear agreement with India, because New Delhi has not signed the Nuclear Nonproliferation Treaty.

"Tokyo will want some kind of commitment from India that it will not conduct a nuclear test. But India will have concerns about its strategic autonomy being curbed if it agrees to conditionalities," said Lalima Varma, professor of Japanese studies at New Delhi's Jawaharlal Nehru University.

"While it's unlikely a civil nuclear deal will be signed during this visit, the two sides will air their concerns. That could be construed as progress," she said.
In 1998, when India conducted its nuclear tests, Japan imposed economic sanctions and cut off financial aid to India. The sanctions were lifted in 2001 and relations have since improved significantly.

India has been trying to upgrade its military equipment and a potential defense agreement to sell US-2 amphibious aircraft to India could turn out to be Japan's first major military sale after it lifted a postwar ban on the export of defense equipment in 2014. Japan's navy uses the US-2 aircraft for maritime surveillance and search and rescue operations.

The two countries are also likely to sign an agreement allowing the transfer of defense technology and co-production of arms and military equipment.

Abe and Modi are expected to explore ways to boost their surprisingly low trade. Analysts say despite a 15 percent annual rate of increase in two-way trade, India accounts for only 1.2 percent of Japan's total trade, and Japan for 2 percent of India's.

In contrast, China accounted for 18.3 percent of total Japanese exports in 2014, said Rajiv Biswas, Asia-Pacific Chief Economist for IHS Global Insight.

Japan's concerns about China's attempt to expand its influence in the region, and India's worries about China's forays into the Indian Ocean, have created enough common ground for Tokyo and New Delhi to consider coordinating maritime security efforts.

In October, Japan joined the Indian and U.S. navies in the annual Malabar exercises in the Bay of Bengal.

"Japanese and Indian forces might not be operating together, but they share the same goal: to maintain the balance of power in the region," said Narushige Michishita at the Woodrow Wilson International Center in Washington.

Modi has said that he wants to attract Japanese investment into Indian manufacturing and infrastructure development, including his grand scheme of building around 100 "smart cities" with integrated transport and communications.

"No nation has contributed so much to India's modernization and progress as Japan," Modi said recently. "And, no partner is likely to play as big a role in India's transformation as Japan."