Japan is likely to clinch the deal to build India's bullet train that is estimated to cost about  $14.3 billion.

The proposed high-speed train that will run between Mumbai and Ahmedabad, a distance of about 500 km, is likely to be financed by Japan, which has reportedly offered a loan of $8 billion for the project. 

The loan offer could be on condition that  India buys  equipment including coaches and locomotives from Japanese firms.

A formal announcement is expected to be made this Saturday by Japanese Prime Minister Shinzo Abe, who is on a three-day visit to India from Friday.

He will be holding talks with Prime Minister Narendra Modi on Saturday after which the two leaders are expected to make a joint statement on prestigious bullet train service, for which work is likely to commence in 2017 to commence the first service in 2023.

If the deal comes through, it will be a big relief for Japan that lost to China in October the project to build a high-speed train connecting Indonesia and Bandung. The project is estimated at about $5.5 billion. Japan had termed Indonesia's decision to award the project to China "difficult to understand".

The India deal, if it materialises, would be the second one for Japan to sell its bullet train technology, after the Taiwan deal in 2007, according to Japanese officials.

Narendra Modi had promised a bullet train service during his election campaign during the Lok Sabha elections last year.