How Bullet Trains Transformed Global Economies and What It Means for India's First HSR Corridor

Over the years, many developed nations have successfully implemented high-speed rail networks, serving a variety of economic and transportation needs. The efficiency of a country’s mass transportation system always remains closely linked to economic growth.

The world’s first high-speed rail service, the Shinkansen, or "bullet train," was launched in Japan on October 1, 1964, connecting Tokyo and Osaka—the country’s most important trade corridor.

Since its inception, Japan's high-speed rail network has continuously expanded, supporting trade, economic opportunities, and regional connectivity. By bringing together the regions along the corridor, it has created a thriving economic zone.

India's high-speed rail ambitions are progressing with the development of the Mumbai-Ahmedabad High-Speed Rail (MAHSR) corridor.

While tracking the progress of the project, Railway Minster Ashwini Vaishnaw recently said, “The upcoming Mumbai-Ahmedabad high-speed rail corridor bullet train project will convert the cities that are part of the project into “one big economic zone”.

Comparing it to Japan’s experience, he added, “When the first bullet train started between Osaka and Tokyo in Japan, all six cities located on the route became a big business hub, including Nagoya and Kyoto.”

The project has achieved 47.17 per cent physical progress as of October 2024, according to the Economic Survey 2024-25.

Sanctioned in December 2015, the project till date has incurred an expenditure of Rs 67,486 crore out of its revised total cost of Rs 1.08 lakh crore. The project is being implemented by the National High-Speed Rail Corporation Ltd. (NHSRCL).

As a first-of-its-kind project in India, this development frequently makes headlines — both for achieving key milestones and other times for facing delays and challenges. Issues like land acquisition, construction setbacks, technology transfers, and negotiations with Japan over the timely delivery of Shinkansen trains have added complexity to the project.

However, given the scale of the project, such challenges are inevitable. Rather than focusing only on these hurdles, it is important to focus on the long-term benefits the corridor is expected to bring—just as high-speed rail has done for other developed economies.

High-speed rail has emerged as the preferred transit mode in several large economies since the 1960s, as it redefined rail travel in Japan, Europe, China, Taiwan, and the USA.

India, as one of the fastest growing economies, yet remained without an operational high-speed rail corridor capable of speeds over 250 km/h.

Now, the 508 km-long high-speed rail line will connect Mumbai, Maharashtra’s capital and India’s financial with Ahmedabad, a major metropolis in Gujarat.

The route will run along the Arabian Sea coast, also connecting Surat and Vadodara, Gujarat’s second and third largest cities. It will bring about such growth that these individual economies will become one big economy.

Currently, this journey takes six to eight hours by train and approximately ten hours by road via National Highway 48. With the MAHSR corridor, travel time will be reduced to 2.5 hours.

A look at High-speed Rail Networks In Global Economies

Since the completion of the 320-mile Tokaido line between Tokyo and Osaka, the Shinkansen network has steadily expanded. The corridor grew to become a hub of infrastructure and economic activity. Historically, "Tokaido" referred to the imperial road connecting Edo (now Tokyo) to Kyoto, but today, it represents an urban region with over 83 million people— nearly 70 per cent of Japan’s population.

Today, Japan operates nine high-speed rail lines covering 22 major cities across three main islands, with three more lines under development. It remains the busiest high-speed rail system globally, transporting over 420,000 passengers daily.

Germany entered the high-speed rail sector in 1991 and now operates 1,334 km of high-speed tracks, with an additional 428 km under construction. Deutsche Bahn’s InterCityExpress (ICE) trains reach speeds of up to 300 km/h.

Similarly, France initiated high-speed rail development post-1964 but introduced its Train à Grande Vitesse (TGV) only in 1981. The French network spans over 2,800 km, enabling speeds of 320 km/h.

Countries typically select high-density corridors for their initial networks. Japan’s Tokyo-Osaka corridor and France’s Paris-Lyon corridor were strategically chosen for their high passenger traffic, and supported in generating surplus revenue for further expansion.

According to South China Morning Post, China's rapid high-speed rail expansion since 2007 has positioned it as the world's largest network, with total railway mileage projected to exceed 50,000 km. By 2024, high-speed lines accounted for 30 per cent of the national railway network, a sharp rise from 20 per cent in 2017. The longest line stretches 2,298 km between Beijing and Guangzhou.

With this network, China’s strategy aimed to connect its coastline with central and western regions for workforce and logistics mobility, market access, and increasing urbanisation. A key aspect of this approach was technology acquisition.

Through joint ventures with Japan, Germany, and France, China secured foreign high-speed rail expertise while ensuring technology transfer. By 2008, China had developed a new generation of high-speed rail trains capable of speeds up to 380 km/h. Since then, it has filed global patents for high-speed rail technologies and aggressively expanded into international markets, turning its massive infrastructure investments into a competitive global advantage. 

Only 5 per cent of train sets were imported, 10 per cent were assembled locally, and 85 per cent were manufactured in China using some foreign components. With its dominant negotiating position, the government mandated foreign firms to transfer technology, establish local supply chains, and train Chinese engineers.

India’s Journey Towards High-Speed Rail 

India, with the world's fourth-largest rail network, stands to gain significantly from a similar network. Beyond reducing travel time and improving the movement of goods, there are also regional impacts of the corridor — reshaping urban landscapes by encouraging high-density, mixed-use developments around stations and also allowing smaller cities or towns to integrate with large regional economies.

If implemented strategically, it also introduces advanced technology, creating opportunities for policy reforms, skill development, and structural improvements within the railway sector.

Since the 2000s, multiple feasibility studies and policy discussions have explored the development of high-speed rail in India. The 2007-08 Railway Budget proposed four high-speed rail corridors, and in 2009, the Vision 2020 document of the Ministry of Railways identified high-density routes such as Ahmedabad–Mumbai–Pune and Delhi–Chandigarh–Amritsar for pre-feasibility studies.

After 2014, Prime Minister Narendra Modi prioritised high-speed rail development as part of a broader vision to modernise infrastructure and strengthen India’s global economic position.

The government attempted engagements with Japan, France, China, and Germany for investment and technology transfer.

In December 2015, both nations signed a Memorandum of Cooperation, with Japan agreeing to fund 81 per cent of the project's cost through a 50-year loan of ¥1.5 trillion at a 0.1 per cent interest rate, including a 15-year moratorium.

The partnership emphasizes technology transfer, with Japan providing E5 Series Shinkansen trains capable of speeds up to 320 km/h. Additionally, a training program for 4,000 Indian personnel has been established to ensure effective knowledge transfer and operational excellence.

A study by the Japan International Cooperation Agency (JICA) projected that the Ahmedabad–Mumbai high-speed rail corridor would serve 40,000 daily passengers in its first year of operation.

However, implementing a project of this scale—one that previous governments hesitated to pursue—came with challenges. Land acquisition, project costs, and feasibility remained key concerns.

Similar historical parallels also exist — Japan’s Shinkansen, introduced 60 years ago, initially faced skepticism but ultimately transformed rail travel. India now stands at a similar crossroads, balancing short-term logistical and financial hurdles against the long-term economic and infrastructural benefits of high-speed rail.

Making Of India’s First High-Speed Rail

In 2017, PM Modi inaugurated the first high-speed rail project as part of the larger Diamond Quadrilateral vision, aimed at connecting India’s metropolitan cities. The future network is projected to span 12,000 km, with major corridors like Delhi–Mumbai (1,386 km), Chennai–Delhi (2,200 km), and Mumbai–Kolkata (2,000 km).

The Ahmedabad–Mumbai corridor was prioritised based on critical feasibility factors ­— high passenger volume, economic significance, and per capita GDP. Maharashtra and Gujarat, together contributing nearly one-third of India’s GDP, have growth rates exceeding the national average. Daily travel demand between these cities is expected to surge from 400,000 to 1 million by 2025-26.

Demographic trends further support the corridor’s viability. Between 2001 and 2011, Maharashtra’s population grew at an annual rate of 1.5 per cent, while Gujarat’s grew at 1.8 per cent. Key urban centres along the route hold high population densities, including Mumbai (42,000/sq km), Thane (23,000/sq km), Surat (14,000/sq km), and Ahmedabad (14,000/sq km).

An effective high-speed rail system thrives on well-distributed populations — for this case, linking key hubs like Anand, Surat, Vadodara, and Thane will drive sustained demand and bring together regional clusters into a unified economic zone.

Like Japan, Unlocking Economic Impacts of India’s HSR

India's entry into the high-speed rail segment through this corridor is a gateway to gaining operational experience and technological expertise.

This could eventually place the country as a key player in advanced rail technology and infrastructure exports — similar to how Japan’s Shinkansen success has not only strengthened its domestic economy but also enabled it to export its expertise worldwide, and China has become a major manufacturer of high-speed trains.

Vaishnaw said that the bullet train will allow professionals and traders from the cities en route to travel on a daily basis from Ahmedabad to Mumbai.

While Mumbai and Ahmedabad will see clear benefits, it is now time to further assess the anticipated impacts on intermediate regions as it progresses to create a dynamic economic corridor.

Here is a case of a major region and industry set to benefit with the introduction of the corridor — Surat. The region has already impacted many residents as the construction led to land acquisition, with Surat receiving approximately Rs 1,998 crore in compensation — the highest among Gujarat’s districts.

However, a long-term impact extends to the diamond industry concentrated between Surat and Mumbai. Surat’s global diamond-cutting and polishing industry has long-standing trade and economic ties with Mumbai.

The Indian diamond market generated a revenue of USD 3,264.2 million in 2024 and is expected to reach USD 4,053.3 million by 2030. This industry stands to benefit immensely from enhanced connectivity and infrastructure developments.

This industry provides employment to approximately 1.5 million workers and contributes over $24 billion to India's exports, accounting for 80% of the nation's diamond exports. Despite Surat's dominance in manufacturing, Mumbai has traditionally been the epicenter for diamond trading, with superior infrastructure and accessibility for international clients.

For over six decades, the diamond polishing and trading industry in Surat has worked in the way it does in the narrow lanes, congested cabins, and setups along the streets of Mahidharpura. It involves nearly 800,000 individuals and contributes nearly Rs 3 lakh crore to India’s gems and jewellery industry.

The diamond industry remains among the most exclusive, dealing with luxurious products where transactions worth crores occur within minutes each day. However, with such conditions, currently, the clients and traders meet in Mumbai, where the Bharat Diamond Bourse (BDB) remains the world’s largest diamond trading hub, located in the Bandra-Kurla Complex (BKC).

Recognising the need to consolidate manufacturing and trading activities, the Surat Diamond Bourse (SDB) was inaugurated on December 17, 2023, by Prime Minister Narendra Modi.

Situated within the Diamond Research and Mercantile (DREAM) City in Khajod, on Surat's outskirts, the SDB is designed to be the world's largest office complex, spanning 6.6 million square feet. It houses 4,717 offices and can accommodate approximately 67,000 diamond professionals under one roof.

The establishment of the SDB addresses longstanding challenges faced by the industry. Previously, traders in Surat were compelled to maintain offices in Mumbai to facilitate exports, while now the SDB comes in as an additional support for large-scale expansion of the diamond industry in India, allowing traders to conduct business directly from Surat.

The launch of the high-speed rail corridor is expected to support Surat’s diamond industry by majorly enhancing connectivity. Travel time between Surat and Mumbai will be reduced to just one hour, a drastic improvement from the current 10-hour daily commute for thousands of diamond traders, clients, and workers.

This link will allow faster movement of traders, clients, as well as goods, while it will also make Surat more accessible to international buyers.

The corridor will set an efficient link between the Surat Diamond Bourse (SDB) and the Bharat Diamond Bourse (BDB) in Mumbai, creating a dual-hub system.

This will allow traders to conduct deals and return within a single day, reducing operational costs and eliminating the need for extensive office setups in both cities. Eventually, this will not only strengthen Surat’s position in the global diamond trade but also deepen its ties with Mumbai’s financial ecosystem.

Moreover, for smaller and emerging traders who previously struggled with logistical constraints, the corridor will open new avenues for business expansion. With the support of the Surat Diamond Bourse, enhanced high-speed rail connectivity, and supporting infrastructure, Surat will be able to establish its long-overdue recognition in the international diamond market.

Thus, while this is one of many anticipated impacts, the launch of the high-speed rail is expected to unlock further opportunities along its route and regions, while also serving as a crucial gateway for India to expand on its high-speed rail ambitions.