Japan has agreed to provide $12 billion of soft funding to build India's first bullet train as Japanese Prime Minister Shinzo Abe and his Indian counterpart Narendra Modi seek to strengthen ties.

The deal for the construction of a high-speed train line connecting India’s financial hub of Mumbai to Ahmedabad city gives Japan an early lead over China, which is examining the ground for high speed trains on other parts of the Indian rail network.

“This enterprise will launch a revolution in Indian railways and speed up India's journey into the future. It will become an engine of economic transformation in India,” Modi said.

Abe and Modi also announced the signing of deals to share technology, equipment and military information.

They also agreed to work towards cooperation in nuclear technology for civilian purposes.

“The memorandum we signed on civil nuclear energy cooperation is more than just an agreement for commerce and clean energy, it is a shining symbol of a new level of mutual confidence and strategic partnership in the cause of peaceful and secure world,” Modi said, adding, “I know the significance of this decision for Japan and I assure you that India deeply respects that decision and will honor our shared commitment.”

“Prime Minister Modi's economic policies are like Shinkansen -- high speed, safe and reliable while carrying many people along,” Abe said in a reference to the Japanese bullet train.

Abe has been spurring businesses in Japan to tap fast-growing emerging markets like India.

Modi and Abe are expected to leave later in the day for India's holiest city of Varanasi and the premier's parliamentary constituency.

India saw its economic growth rate jump to 7.4% in the second quarter of the financial year, outperforming China.