Indian railways seeks private finance in London for new stations and track

The Indian Prime Minister has announced a Government-backed railways rupee bond will be issued on London's stock market to help finance the network's future development.

The Indian Railways has set out plans for extensive development, including new stations and track, and sees private finance as playing a role in the projects. The Chancellor George Osborne hailed the 'Masala bonds,' to raise up to £1bn for projects such as the expansion of the railways, which he said "combine the ingredients of Indian finance with British financial ingenuity".

A memorandum of understanding on technical co-operation in the rail sector was also agreed, "to boost potential business opportunities for the rail industry" in the U.K. The two governments will encourage their institutions to work together and develop options for infrastructure financing.

This followed a visit by Indian railways minister Suresh Prabhu last month including to meet transport secretary Patrick McLoughlin, in which he was reported as saying the UK was "keen to invest" in the transport system.