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IDJ English – Contribution

Maximizing the Effects of High-Speed Railways on the Indian Shinkansen

Nikhil Bugalia, Shreyas Bharule, K.E.Seetharam – ADBI

The first High-Speed Railway (HSR) in India is under construction between Mumbai and Ahmedabad utilizing Japan’s Shinkansen technology. What points can maximize the economic effect? The research team headed by Dr. K.E. Seetha Ram, Senior Consulting Specialist at the Asian Development Bank Institute (ADBI), explains.


Railroads support logistics and the economy during the COVID-19 crisis

In the last 5 decades, evolution in rail transport has given birth to highspeed rail (HSR), marking the “second age of rail.” During this time, HSR networks have grown rapidly, reducing the travel time between cities in East Asia and Central Asia while connecting countries in Europe and shrinking the time-space geography of the continents. India is developing its first High-Speed Rail (HSR) project between the cities of Mumbai, in Maharashtra, and Ahmedabad, in Gujarat, one of the prominent economic corridors in India.

On the one hand, there is a strong commitment from the national government in India to develop the first project and commence the work on 6 new HSR lines[1], connecting other prominent economic corridors in India. While, on the other hand, the work on Mumbai-Ahmedabad HSR (MAHSR) line has hit several roadblocks in the recent past, including escalations in cost, an extension of the project schedule, and tepid progress towards land-acquisition[2].

Nevertheless, the work is progressing. In India, questions on whether or not an HSR line is suitable for the country have yet not settled[3]. However, among the chaos, the one positive is the increased interest from several stakeholders demanding to base the decisions on evidence and asking for a detailed understanding of the impacts that the Indian HSR is expected to bring[4].

The Asian Development Bank Institute (ADBI) has also been working collaboratively with the practitioners, academics, and policymakers from around the globe to answer several of the HSR related questions raised in India. Through its 2 year-long activities of reviewing HSR development experiences around the world, gathering evidence for identifying what works and what doesn’t, developing tools and methodologies necessary to support the decisions among policymakers, ADBI has been providing recommendations for evidence-based policies and the means to implement these policies for the ease of decision-makers[5].  In this article, we provide a summary of our findings, while addressing the questions raised previously and providing a pathway to move forward.

The ongoing debate in many Asian countries is not new. Japanese policymakers had a similar debate before HSR was first introduced. Over the years, Japanese HSR has faced public criticism on a number of occasions, but its success is cemented in the firm commitment of all stakeholders to continuously improve the whole system. When starting a new project, it is important to match the HSR system to the socio-economic conditions of a country. Comparing India’s position on certain socioeconomic indicators with that of countries that have introduced HSR gives a reasonable estimate on whether it is suitable to introduce HSR in India.[6]

The suitability of HSR construction is not a question in our view. Through our activities, we have gathered information on a range of socioeconomic indicators for countries with successful HSR systems. Comparing these with the current socio-economic situation in India makes it clear that the economy is mature enough for HSR introduction. In Japan, GDP per capita was $4,700 in 1959, a year when the construction of HSR started. In many European countries, which introduced HSR after that, it was above $14,000 in the starting years of their HSR construction. In China, the figure was $6,200. The collective experience from abroad suggests that GDP per capita of more than $5,000 is suitable for HSR introduction.

India, as one of the fastest-growing economies in the world, reached that mark in 2015. India’s GDP per capita along the proposed Mumbai–Ahmedabad corridor already surpasses that of the Tokyo–Osaka corridor in Japan and many others in mainland China. As of 2017, GDP per capita in PPP terms is more than $6,000, signifying that India meets the criteria of HSR introduction based on the GDP indicator. Further, the overall demand for HSR is also a function of population density in the HSR corridor. The figure below shows India’s comparative position when looking at its current state of GDP per capita and population density along a corridor relative to that of the economy. It is evident that the socioeconomic conditions along the Mumbai–Ahmedabad corridor in India in 2017 make it suitable for HSR construction. The population density for MAHSR is also comparable to the Osaka–Fukuoka corridor, another HSR model case in Japan, operating profitably since the beginning of its inception.


While the rationale for the MAHSR project based only on the macroeconomic indicators affecting ridership provides support for the feasibility of the project, the ridership alone is not the only justification for HSR development. Academic studies on the topic under the ADBI umbrella have now also gathered evidence for the significant long-term socioeconomic impacts, known as the spillover effects, at the urban, regional, and national levels. Including such academic evidence in the decision-making process is thus essential to make a sound judgment about the investment. ADBI’s work form the past two years have established beyond doubt, that developing countries have much to gain from the development of transport modes such as HSR that provide high-speed mobility to masses of their population. ADBI’s work provides empirical evidence of the much-debated spillover effects of large-scale transport projects. For example, a positive effect on the average land prices in HSR regions from the start of construction was observed in Taipei, China, with the effect becoming even larger after the beginning of the operation[8]. Similarly, a positive effect on the tax-revenue in the region can also be seen for Kyushu HSR in Japan[9] [10].


The Need to create a long-term development plan including areas along the railway line

While numerous examples of spill-over effects of the HSR projects have been documented in ADBI’s studies, our conclusion is still that HSR development is not a sufficient condition for socio-economic development. Gaining on such benefits often requires long-term integrated planning such that HSR can complement the existing economic activities in the region. In a study examining the relationship between HSR and the agglomeration economy in the scope of specialization and diversity, in Japan, the analysis reveals that both specialization and diversity benefit economic productivity[11].

Yet, a city that is not specialized and does not have a high level of industrial diversity will lose out in the economy. Further, distance to HSR services could affect a city’s specialization and diversity. Hence, the planning of HSR should be conducted in a way so as to enhance the specialization of the regional economy, which requires coordination between several of the national and regional government and business agencies. For example, the data presented for the case of Japan suggests that the mere connection to HSR did not lead to a rise in local economic activities (tourism or the number of businesses, etc.), but only those regions that developed unique strategies using HSR as a tool benefitted.

In Japan, a common practice among local governments is to develop tourist packages in collaboration with HSR operators to promote local tourism. In the absence of these unique characteristics, the chances are that because of the HSR; economic activities might even move away from the region. Hence, efficient coordination between the national and local governments, local businesses, and HSR-operating companies are necessary for realizing the abovementioned benefits.

Further, evidence from academic work emphasizes that intercity and interregional HSR investments can create regional imbalances. When the city or region pairs have different levels of development, such HSR investments may work in favor of larger, so-called primate cities or regions at the expense of weaker surrounding areas. Along a proposed corridor, cities with access to HSR through a station may accrue benefits, although the distribution of impacts and gains requires rigorous study. Cities of regional importance might benefit to the detriment of neighboring hinterlands, although various researchers have argued that countries with dominant cities tend to accumulate net benefits.

Thus, HSR systems should be built to reinforce accessibility and strengthen interregional, as well as intraregional relations[12]. Here, in the light of several ongoing HSR development plans across the world, the Japanese experience in Shinkansen-related regional development provides use cases to learn from for national economic planning, tourism promotion, development around HSR stations, and Transit-Oriented-Development (TOD).

On the other hand, all direct and indirect benefits of the HSR are linked with the level of its usage, which in turn depends on the operational performance of HSR in terms of safety, convenience, and reliability of the services[13]. Here also, a strong partnership between the regulator, the operator, and the passengers is necessary to support continuous improvement in the system so as to achieve the highest level of performance. All successful HSR systems around the world have adopted a wider definition of the railway system comprising not only state-of-the-art technology but also the roles of various human and organizational factors. Further, all parts of the systems are required to evolve in-sync with each other, where the organizational and regulator processes should be able to keep pace with the rapidly changing technical systems so as to create an enabling environment for positive system improvement rather than creating impediments[14].

In conclusion, based on the evidence gathered by ADBI over the course of the past 2 years, the suitability of HSR construction is in India is not a question in our view. However, only when the HSR developing countries have taken sufficient measures to localize HSR as much as possible, through long-term integrated planning, the wider economic benefits of the project, which can last for decades, can be realized. Hence, the success of the upcoming Indian HSR relies on the collaborative efforts of all the stakeholders. Working together, they can ensure that the HSR project delivers on its promises of long-term socioeconomic growth for India. Taking a cue from the announcement on the 6 new HSR corridors in India, the need for the hour is to study the network-effects of HSR in India and abroad so that a consistent long-term plan can be developed and later on implemented for the socio-economic development of India.


 International Development Journal  2020 July edition



国際開発ジャーナル7月号  世界を読む


アジア開発銀行研究所(ADBI 上席コンサルティング・スペシャリスト





















(略歴) K. E. Seetha Ram インド工科大学(IIT)マドラス校卒業後、アジア工科大学院で工学修士号、東京大学大学院で工学博士号を取得。シンガポール国立大学リー・クアンユー公共政策大学院客員教授などを経て、2017年から現職。東大空間情報科学研究センター客員教授、東日本旅客鉄道(株)(JR東日本)インド高速鉄道特別アドバイザーも兼務




[1] https://economictimes.indiatimes.com/industry/transportation/railways/6-more-routes-identified-for-high-speed-corridors-dpr-ready-in-a-year-railways/articleshow/73730658.cms?from=mdr

[2] https://english.kyodonews.net/news/2020/02/297b586def24-indias-railway-project-with-japan-faces-45-bil-budget-shortfall.html

[3] https://www.asiapathways-adbi.org/2019/10/thinking-beyond-the-suitability-of-high-speed-railway-in-india/

[4] https://economictimes.indiatimes.com/industry/transportation/railways/centre-allots-rs-5-6k-cr-to-bullet-train-maharashtra-will-also-have-to-contribute/articleshow/73982598.cms

[5] https://www.adb.org/adbi/search?keywords=High-Speed+Rail

[6] https://www.adb.org/sites/default/files/publication/497781/adbi-high-speed-rail-services-asia.pdf#page=122

[7] https://www.asiapathways-adbi.org/2019/10/thinking-beyond-the-suitability-of-high-speed-railway-in-india/

[8] https://think-asia.org/handle/11540/10221

[9] https://www.adb.org/publications/impact-infrastructure-investment-tax-estimating-spillover-effects-kyushu-high-speed

[10] https://www.adb.org/publications/innovative-measures-infrastructure-investments

[11] https://www.adb.org/publications/industrial-specialization-or-diversity-high-speed-rail-japan

[12] https://www.adb.org/publications/evolution-high-speed-rail-its-development-effects-stylized-facts-review

[13] https://www.adb.org/publications/high-speed-rail-services-asia

[14] https://www.adb.org/publications/privatization-japan-railways-japan-post-why-how-and-now


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