Japan has offered India a loan to finance its first bullet train, edging out China in the battle to develop infrastructure in south Asia. The train will ply between Mumbai and Ahmedabad in a project that is estimated to cost more than Rs 97,000 crore, said a Reuters report. The train is expected to cut the journey time along the 505-kilometre corridor from seven to two hours. It is part of the central government’s broader plan to connect Mumbai, Delhi, Kolkata and Chennai through a high-speed rail network dubbed the “Diamond Quadrilateral”.

By offering a loan at an interest rate of less than 1%, Japan has ensured that India is likely to pick its companies to build the project, as no other country has yet offered funding in addition to the required technology. Japan has offered to pay for 80% of the project, as long as India buys 30% of the equipment required from Japanese firms. Both Japan and China have been fighting over contracts to build major infrastructure projects in Asian cities. Last month, China won the bid to assess the feasibility of a 1,200 kilometre-long high-speed rail corridor between Mumbai and Delhi.