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Section : Economics

As India builds its roads and rail, Japan is ready to do business
India's total railway track length exceeds 65,000 km, the fourth-largest in the world.

By Interviewed by Nikkei staff writer Hisashi Iwato

Commuters move at a crowded railway station in Mumbai in July. © AP

TOKYO -- India is planning massive railway and highway expansion projects, both at the national and state levels, to build up its infrastructure and bring in foreign businesses. 

     The country has become an ever more important market for many Japanese companies that are seeking to export their infrastructure-related technology and know-how in tandem with the Japanese government.

     In a recent interview with The Nikkei, Katsuo Matsumoto, deputy director general of the South Asia Department of the Japan International Cooperation Agency talked about the state of India's transportation system and the challenges to its improvement, as well as prospects for Japanese businesses.

     Excerpts of the interview follow:

Q: What is your view of India's current transportation networks?

A: India is seeing a rapid increase in traffic and transportation volume, but its social infrastructure projects are not keeping pace. Roads play a central role in India's transportation, accommodating 85% of total passenger traffic and 60% of total cargo shipment.

Katsuo Matsumoto

     The country has a total of 4.11 million kilometers of road, the second most in the world. But it has about half of the world's average amount of roads in terms of density per person. India's road traffic volume grows by 9.1% a year, but road construction isn't fast enough to keep up. Major roads and city streets are severely congested, and so India faces a huge issue.

     In 1998, the Indian government mapped out the national highways development project and has since pushed for building highways and main regional roads throughout the country. The Golden Quadrilateral highway network linking Delhi, Kolkata, Chennai and Mumbai has been nearly completed, along with the East-West corridor and the North-South corridor. Currently, the government is working to make multi-lane roads, such as turning two-lane roads into four-lane roads.

Q: Is the government making progress on the construction of expressways?

A: The government is trying to broaden expressway networks through a public-private partnership scheme. Much progress has been made on those expressways in suburbs of major cities as they are considered lucrative projects. In contrast, not many private companies have shown interest in expressway construction in rural areas due to poor profitability, and things have stalled over the past few years.

Q: India is also known for its railway network. What kind of issues does India's railway system face today?

A: As a former British colony, India has a history of extensive railway networks. Its total railway track length exceeds 65,000 km, the fourth-largest in the world. Even with the railways, cargo transport is increasing at about 15% a year in volume, with its transportation capacity nearing the limit.

Q: There has been much attention on whether India will adopt the Japanese high-speed train system. What is your take on that?

A: Japan and India have jointly financed a business feasibility study on a high-speed train project between Ahmedabad and Mumbai. Many Indians take domestic flights between major cities, so there must be strong demand for high-speed trains. If Japan can win a contract for India's first high-speed train route with its shinkansen bullet train system, chances are high that India will also adopt the Japanese system for the six following projects due to train track joint issues.

     Aside from the bullet train, subway projects also present an opportunity for Japanese companies. JICA currently offers assistance to subway system projects in five Indian cities, but there are such projects in the pipeline for 22 cities with a population of over 2 million each.

Q: New Indian Prime Minister Narendra Modi reportedly puts much focus on rebuilding the country's railway system. What do you think of that?

A: Indeed, Modi stresses the need to improve and modernize India's railway system and identifies that as one of his top priorities. That said, land acquisitions and other necessary procedures tend to take too long in India and things do not necessarily go as planned. However, his government is determined to push ahead with this project.

     There may be some high risks (associated with the high-speed train project), such as requests for local production and participation in the management. Even so, India remains to be an attractive market for Japanese businesses.

Interviewed by Nikkei staff writer Hisashi Iwato

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