Vinod Rai named chair of Banks Board Bureau

Feb 28, 2016 0

New Delhi–Former comptroller and auditor general Vinod Rai has been named the first chairman of the Banks Board Bureau that will give advice on how to recover the bad loans of state-run banks.

In a statement, Finance Minister Arun Jaitley said Prime Minister Narendra Modi has approved the proposal from the department of financial services for the constitution of the bureau with chairman and members for two years.

Vinod Rai (Photo: Wikipedia)

Vinod Rai (Photo: Wikipedia)

The members co-opted to the board are Anil K. Khandelwal, former chair of Bank of Baroda, H.N. Sinor, former joint managing director of ICICI Bank and Rupa Kudwa, former managiig director and chief executive of Crisil.

Rai was the chair of India’s official audit agency when a spate of alleged financial irregularities came to fore during the tenure of Prime Minister Manmohan Singh’s government, notably in telecom and coal space.

Sunday’s announcement comes a year after Jaitley had said in his last budget speech that an autonomous bureau will be set up to improve the governance of India’s state-run banks.

“The Bureau will search and select heads of public sector banks and help them in developing differentiated strategies and capital raising plans through innovative financial methods and instruments,” Jaitley has said.

“This would be an interim step towards establishing a holding and investment company for banks,” he had said.

The situation now has caused much concern since the quantum of exposure of Indian scheduled banks in terms of gross non-productive assets, re-cast loans and write-offs was Rs.9.5 lakh crore as of September last year.

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Modi to visit US, Belgium and Saudi Arabia in end of March

Feb 28, 2016 0

New Delhi (IANS)Prime Minister Narendra Modi will embark on a three-nation visit on March 30 during which he will hold a bilateral summit with the EU in Brussels, attend the Nuclear Security Summit in Washington, and become the first Indian prime minister to go to Saudi Arabia in six years.

Modi will visit Brussels on March 30 for the first India-European Union (EU) summit in four years.

Prime Minister Narendra Modi

Prime Minister Narendra Modi

EU Ambassador to India Tomasz Kozlowski said in a media interaction in December that India was an extremely important partner for the EU and the new economic and social agenda of the NDA government was specially attractive. He however had noted that that the relationship has not met both sides’ expectations despite the potential.

With India being an important trading partner of the 28-nation politico-economic union, he said the EU was “really interested” in completing a free trade agreement with it.

Modi had met presidents of the European Commission and European Council, Jean-Claude Juncker and Donald Tusk, on the sidelines of the G20 Summit in Antalya in Turkey in November last year.

After Belgium, Modi will be in Washington on March 31 to attend the Nuclear Security Summit (NSS) amid much speculation that he will meet Pakistani Prime Minister Nawaz Sharif on the sidelines.

The NSS is expected to be attended by the leaders of around 50 countries.

On his way back, Modi will stop in Riyadh – a visit which assumes significance in the face of the current regional situation and strained relations between the Gulf kingdom and Iran, another strategically important country for India.

Saudi Arabia is also home to nearly three million Indian expatriates, most of whom are blue collar workers.

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Indian policy and business digest

Feb 25, 2016 0

Government Offers 25% Share to Pvt. Firms in Defense Production

Private sector manufacturers have an opportunity to pick up a 25% share of defense production, said A.K. Gupta, Secretary, Ministry of Defense. According to Gupta, the Government has identified 25 projects that it plans to open to the industry, adding that the Ministry has also simplified export procedures and eliminated licensing bottlenecks.

Govt. Approves More Solar Parks Exceeding Original Plan

India-lionThe total number of approved solar parks has risen to 33 in 21 states with an aggregate capacity of 19,900 MW, an official statement said. The number of solar parks exceeds the original plan of 25. Govt. has launched several projects like Scheme for Development of Solar Parks to achieve 20 GW through ultra mega solar parks.

Road Ministry Unveils Major Plan for Logistics Hubs and Ports

Speaking at the ‘Make In India’ Week, Minister of Roads and Highways Nitin Gadkari has announced policies for developing logistics hubs using 350 ring roads; development of 2,000 ports along 8,700 miles of coast and introduction of e-tolling across 360 toll plazas.

WTO Trade Facilitation Pact Cleared

The Cabinet has approved the World Trade Organization’s Trade Facilitation Agreement, which seeks to ease customs procedures to boost commerce. The pact aims to expedite the movement, release and clearance of goods, including goods in transit, for international trade. According to the WTO, full implementation of TFA could increase global merchandise exports by up to $1 trillion annually.

Govt. Sets Definition of ‘Start-Up’

The Government has come out with a uniform definition of start-ups under which an entrepreneur with a turnover of less than $3.6 million can avail tax breaks and other benefits for a five-year period. Entities formed by splitting or re-construction of existing businesses will not be considered start-ups.

India-defense‘Make In India’ Racks Up $222 Billion in Pledges

The “Make In India” summit in Mumbai that was inaugurated by Prime Minister Modi closed with $222 billion in investment pledges. Amitabh Kant, Secretary of India’s Department of Industrial Policy and Promotion, said he expected 80-85 percent of the pledges to convert into actual business, much of it from foreign investors.

USIBC: U.S. Firms May Invest $27 Billion in India Over Next 2 Years

American companies invested more than $15 billion since the Modi Government came to power and are expected to add an additional $27 billion over the next two years, according to the U.S.-India Business Council (USIBC). “The reforms undertaken by India in the last two years under Prime Minister Modi’s leadership are resonating very well with the U.S. companies,”the USIBC said.

Moody’s Pegs India’s GDP Growth at 7.5% in 2016, 2017

The Indian economy will grow at 7.5 percent in 2016 and 2017 and is relatively less exposed to external headwinds and will benefit from lower commodity prices, Moody’s Investors Service said. Amid low growth in global trade in goods, India’s large services export sector (IT services) provides another source of resilience.

India Gets First U.S. Business Center in Mumbai

Motivated by the commitment to rapidly expand U.S.-India investment and trade, the first U.S. Business Center in India has been inaugurated in Mumbai. Services available to U.S. organizations include accounting, payroll, compliance services, staff, recruitment and HR advisory, sales and business development support, market research and channel development.

Apple’s 1st Offshore Tech Development Center Set for India

Apple will build its first technology development center outside the U.S. in Hyderabad, India, with an investment of $25 million, likely employing about 4,500, and is set to start in the latter half of this year. Apple follows Google and Microsoft, which have said they will invest in the state.

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WTO rules against India on US solar exports

Feb 24, 2016 0

By Arun Kumar

Washington–In a setback to India, a World Trade Organization (WTO) dispute settlement panel has ruled in favour of the US in its challenge to New Delhi’s alleged discrimination against US solar exports, according to US Trade Representative (USTR).

The panel agreed with the US that India’s “localisation” rules discriminated against imported solar cells and modules under India’s National Solar Mission, according to an official news release citing USTR Michael Froman.

Michael Froman

Michael Froman

India’s domestic content requirements, it agreed, discriminate against US solar cells and modules by requiring solar power developers to use Indian-manufactured cells and modules rather than US or other imported solar technology in breach of international trade rules.

The panel also rejected India’s defensive arguments and determined that India’s local content requirements are inconsistent with the national treatment obligations in Article 2.1 of the Agreement on Trade-related Investment Measures (TRIMs Agreement) and Article III:4 of the General Agreement on Tariffs and Trade 1994.

The USTR called it “an important outcome, not just as it applies to this case, but also as other countries consider localization policies.”

USTR said it initiated this dispute in February 2013 because it considered that India’s domestic content requirements are inconsistent with WTO rules that prohibit discrimination against imported products.

The US, it said, has consistently made the case that India can achieve its clean energy goals faster and more cost-effectively by allowing solar technologies to be imported from the US and other solar producers.

“Today, the WTO panel agreed with the United States that India’s ‘localization’ measures discriminate against US manufacturers and are against WTO rules,” Froman said.

The US and India “are strong supporters of the multilateral, rules-based trading system and take our WTO obligations seriously,” he said.

“This is an important outcome, not just as it applies to this case, but for the message it sends to other countries considering discriminatory ‘localization’ policies.”

“The United States strongly supports the rapid deployment of solar energy around the world – including in India,” Froman said.

“But discriminatory policies in the clean energy space in fact undermine our efforts to promote clean energy by requiring the use of more expensive and less efficient equipment, raising the cost of generating clean energy and making it more difficult for clean energy sources to be competitive,” he said.

The US had challenged the Government of India’s imposition of domestic content requirements for solar cells and modules under India’s National Solar Mission.

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Will decide on Tata’s suggestion at right time: Minister

Feb 22, 2016 0

New Delhi– The Indian government welcomes Tata Sons chairman emeritus Ratan Tata’s suggestion to waive the 5/20 rule allowing overseas flights by Indian carriers only if they have five years experience and 20 aircraft but will take a call on such issues at the appropriate time, Minister of State for Civil Aviation Mahesh Sharma said on Monday.

Mahesh Sharma

Mahesh Sharma

“We salute him (Tata). As an Indian citizen, he has given a suggestion. We welcome his suggestion. We will try to take a call on his suggestion,” Sharma, who is also the tourism minister, told reporters at an event here to launch a mobile app of the tourism ministry.

“We as a government are here to address and take call on such issues which come from various stakeholders and well wishers. The government will take a call at the right time,” he said.

In a tweet on Sunday, Tata had favoured waiver of the 5/20 rule, and charges older airlines were seeking it be retained but budget carrier SpiceJet chairman Ajay Singh had joined issue, opposing his demand.

“It is sad to see incumbent (old) airlines lobbying for protection and preferential treatment for themselves against the new airlines, which have been formed in full compliance with prevailing government policy and providing air transport to Indian citizens in line with the dream of ‘New India’,” tweeted Tata.

In rebuttal, Ajay Singh said: “All of us were asked to serve our great country before we got profitable rights to fly abroad. We served with great pride. What is wrong if these two foreign-controlled airlines are also asked to serve India before being allowed to fly international?”

Tata Sons-funded full-fledged airline Vistara with nine planes and budget carrier AirAsia India with six aircraft are opposed to the 5/20 rule, as they both are less than two years old and hence not eligible to operate international flights.

Vistara is a joint venture with Singapore Airlines, while AirAsia India is a tri venture with Air Asia Berhard of Malaysia and Arun Bhatia’s Telstra.

Tate’s observations came at a time when the Narendra Modi government is seized of the contentious issue on the civil aviation ministry’s draft policy and response it got from stakeholders in the sunrise sector.

Singh however maintained: “Tata, whom we respect greatly, should in fact urge these airlines in which his group is a shareholder, to serve India willingly before being allowed to fly international.” He claimed that Vistara and AirAsia India undertook to follow the 5/20 rule before obtaining a licence though they were opposing it now.

Tata’s tweet follows a representation by the Federation of Indian Airlines (FIA) comprising Jet Airways, SpiceJet, IndiGo and GoAir to Minister of State in the PMO Jitendra Singh on retaining the 5/20 norm, auctioning of additional seats to foreign carriers among other issues.

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Tatas, older airlines spar over flying abroad norm

Feb 21, 2016 0

Bengaluru–A spat broke out in India’s civil aviation sector on Sunday with the Tatas-funded twin carriers and older airlines arguing over whether the 5/20 rule should be retained or relaxed in the new aviation policy.

Hours after Tata Sons chairman emeritus Ratan Tata, in a tweet, favoured waiver of the 5/20 rule, which mandates five years experience and 20 aircraft fleet to qualify to fly abroad, budget carrier SpiceJet chairman Ajay Singh joined issue, seeking it be retained.

Ratan Tata

Ratan Tata

“It is sad to see incumbent (old) airlines lobbying for protection and preferential treatment for themselves against the new airlines, which have been formed in full compliance with prevailing government policy and providing air transport to Indian citizens in line with the dream of ‘New India’,” tweeted Tata.

In rebuttal, Ajay Singh said: “All of us were asked to serve our great country before we got profitable rights to fly abroad. We served with great pride. What is wrong if these two foreign-controlled airlines are also asked to serve India before being allowed to fly international?”

Tata Sons-funded full-fledged airline Vistara with nine planes and budget carrier AirAsia India with six aircraft are opposed to the 5/20 rule, as they both are less than two years old and hence not eligible to operate international flights.

Vistara is a joint venture with Singapore Airlines, while AirAsia India is a tri venture with Air Asia Berhard of Malaysia and Arun Bhatia’s Telstra.

Noting that lobbying for discriminating policies between old and new airlines was reminiscent of the protectionist and monopolistic pressures by vested interest entities which seem to fear competition, Tata lamented that such moves held back progress in India compared to open economies that thrived on competition abroad.

“The call for a new open market economy in India will promote growth in an open market based on competitiveness and not from self interest-based protectionism,” Tata said in his message posted on his Twitter account.

His observations came at a time when the Narendra Modi government is seized of the contentious issue on the civil aviation ministry’s draft policy and response it got from stakeholders in the sunrise sector.

“Tata, whom we respect greatly, should in fact urge these airlines in which his group is a shareholder, to serve India willingly before being allowed to fly international,” Singh observed, claiming that Vistara and AirAsia India undertook to follow the 5/20 rule before obtaining a licence though they were opposing it now.

Applauding Civil Aviation Minister Ashok Gajapathi Raju and his ministry for considering the removal of the controversial 5/20 rule, Tata said he hoped the new policy would be free of discrimination and protectionism so that Indian aviation could grow for the benefit of consumer and common man and not to even the interests of select beneficiaries.

Tata’s tweet follows a representation by the Federation of Indian Airlines (FIA) comprising Jet Airways, SpiceJet, IndiGo and GoAir to Minister of State in the PMO Jitendra Singh on retaining the 5/20 norm, auctioning of additional seats to foreign carriers among other issues.

Stating that Vistara and AirAsia India were controlled by their foreign parents, Singh said their holdings in both the joint ventures of Tatas were in violation of the Indian laws that require airlines to be effectively controlled by Indian shareholders.

“Tata should urge both the airlines to follow Indian laws in letter and spirit,” Singh said, adding no country the world over, including Singapore and Malaysia, allows its airlines to be controlled by foreign airlines.

“If Indian airlines like SpiceJet and Indigo are not allowed in these countries, why should they be allowed to control airlines in India?” he asked.

The spat came to the fore three days after Home Minister Rajnath Singh on February 18 chaired a high-profile meeting to discuss the proposed aviation policy, amid hectic lobbying by domestic carriers for a level-playing field vis a vis foreign players, and demands for continuing the norms to fly overseas.

Among the seven main scheduled airlines in the country, only four meet the requirements — Air India, Jet Airways, SpiceJet and IndiGo. The three others — GoAir, Vistara and AirAsia India — are not eligible under the present norms.

At the same time, several aviation research institutions such as the Centre for Asia Pacific Aviation, have described the rule as being damaging, discriminatory and anti-competition, besides preventing carriers from optimal fleet utilisation and expansion.

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Indian Business Briefs and Policy News

Feb 18, 2016 0

India Permits Sharing of Active Telecom Infra

The Department of Telecommunications has decided to allow sharing of active telecom infrastructure, such as antennae, feeder cables, and transmission systems. This is expected to lower costs for operators and lead to faster roll out of networks. This would help operators enhance their network coverage area and fill the gaps, enabling them to improve quality of service.

Foreign Exchange Management Act Norms Rationalized

Make-Modi-MEA-TwitterWith a view to rationalize the regulations in light of evolving business environment and changing practices in cross-border transactions relating to external trade and payments, the Reserve Bank introduced nine updated regulations under the 1999 Foreign Exchange Management Act (FEMA). The Central Bank’s initiative contributes to promote the ease of doing business in India.

Cabinet OKs Formation of JV Cos. For Rail Infrastructure Projects

Cabinet has okayed formation of joint venture companies with the state governments to mobilize resources for undertaking various rail infrastructure projects in the states. The joint venture companies would ensure greater participation of state governments in the implementation of railway projects both in terms of financial participation as well as decision-making process and will facilitate faster statutory approvals and land acquisitions.

India, U.S. Sign Agreement to Improve Systems at DGCA

India’s aviation regulator, the Directorate General of Civil Aviation (DGCA), and the United States Technical Development Agency (USTDA) signed an agreement for India Aviation Safety Technical Assistance. “….this is aimed at bringing in more systemic improvements in the area of operation, airworthiness and licensing. It will include components on general aviation and business aviation,” the Government said in a release.

Govt. Approves Policy for Capital Goods Sector

The Government has cleared the policy for the country’s capital goods sector. The policy recommends integration of key capital goods sub-sectors and mandatory standardization, and advocates launching a technology development fund under the public private partnership (PPP) model to fund technology acquisition, transfer of technology, purchase of intellectual property rights (IPR), designs and drawings as well as commercialization of such technologies of capital goods.

Prime Minister Modi Launches Make in India Week

Lunching the largest-ever manufacturing summit ‘Make In India Week’ in Mumbai, Prime Minister Modi said the government is swiftly working towards a transparent and predictable tax regime to make the country a global manufacturing hub. Make in India is flagship initiative of the Government to encourage international companies to manufacture their goods in India.

Domino’s Opens 1,000th Store in India

Domino’s Pizza opened its 1,000th store in Delhi. India is Domino’s fastest-growing international market with more stores than any other market outside the United States. Domino’s is the largest pizza brand in India

Indians 3rd Biggest Investor in U.S. Realty Market at $8 Billion

Indians are the third biggest international investor community with $8 billion investment in the U.S. realty market, brokerage firm Sotheby’s International Realty said. “I think and I believe Indians that live in the U.S. are one of the largest group of millionaires in the America… they are already there and therefore they are investing in real estate,” said U.S.-based Sotheby’s International Realty President and CEO Philip A. White.

Boeing will Invest Billions of Dollars in India

Boeing plans to invest billions in India, but their investment is more than financial. According to Dennis A. Muilenburg, president and CEO of Boeing, the U.S. aircraft manufacturer is also looking to invest in capabilities, infrastructure, and partnerships to enable aerospace to be an economic growth engine. Boeing is engaged in a long-term commitment to build aerospace capacity in India.

Marriott Launches its First Dual Branded Hotel in India

Luxury lodging service provider Marriott International Inc. opened its first dual branded property-Courtyard and Fairfield-in Bengaluru with an investment of around $44 million. The new 336-room hotel is Marriott’s 31st hotel in India. Global luxury hotels have increased their focus on the Indian market on account of growing demand coming in from tier II and III cities.

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National Textile Policy likely by April

Feb 18, 2016 0

Mumbai–Textiles Minister Santosh Kumar Gangwar on Thursday said the long awaited National Textile policy is nearing finalisation and is likely to be issued before the end of April.

Interacting with media persons after participating in the Make In India Week here, he said consultations with all stakeholders are in progress and he was confident that the new textile policy will be released during the budget session of parliament.

Textiles Minister Santosh Kumar Gangwar

Textiles Minister Santosh Kumar Gangwar

“The textile and apparel industry is one of the key sectors of India’s manufacturing segment as it contributes significantly to the economy in terms of employment generation, foreign exchange revenue and above all, its backward linkages to the rural economy that gives huge opportunities to millions of farmers, artisans, handloom and handicraft manufacturers,” the minister said.

He said India will be exporting around $185 billion of textile and apparel by 2025.

Considering the targeted growth in exports, Gangwar said India should be able to double the share of the global textile and apparel trade from the present level of 5 percent.

He said the dynamics of the market economy have thrown up both opportunities and challenges to the textile industry and different countries in the region have concentrated in areas where they have comparative advantage.

“Countries such as Bangladesh and Vietnam have entered the league of big players in the global market. The Indian textile industry should gear up to attain its desired position in the global market and the government is willing to provide all possible support by creating enabling frameworks,” the minister added.

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Union cabinet gives nod to build gravitational wave observatory in India

Feb 17, 2016 0

New Delhi–In a major boost to Indian science research, the Union cabinet on Wednesday approved a proposal to establish a state-of-the-art gravitational wave observatory in India in collaboration with the Laser Interferometer Gravitational-wave Observatory (LIGO) in the US.

The “in principle” approval for the LIGO-India project for research on gravitational waves – a discovery that is regarded as the breakthrough of the century – is piloted by the Department of Atomic Energy and Department of Science and Technology (DST), a press release said.

GravitationalThe project will bring unprecedented opportunities for scientists and engineers to dig deeper into the realm of gravitational wave and take global leadership in this new astronomical frontier.

The LIGO-India project will also bring considerable opportunities in cutting-edge technology for the Indian industry which will be engaged in the construction of the eight-km long beam tube at ultra-high vacuum on a levelled terrain.

Confirming a major prediction of Albert Einstein’s 1915 general theory of relativity, scientists including several of Indian-origin this month observed gravitational waves, or ripples in the fabric of space time, arriving at Earth from a cataclysmic event in the distant universe.

Prime Minister Narendra Modi expressed his happiness over the historic detection of gravitational waves and lauded the role of Indian scientists in the project.

“Historic detection of gravitational waves opens up new frontier for understanding of universe. Immensely proud that Indian scientists played an important role in this challenging quest,” he tweeted.

Dubbed as the breakthrough of the century, the international team of scientists believes that the detection of gravitational waves will open an unprecedented new window to the cosmos.

Gravitational waves carry information about their dramatic origins and about the nature of gravity that cannot be obtained from elsewhere.

Physicists have concluded that the detected gravitational waves were produced during the final fraction of a second of the merger of two black holes to produce a single, more massive spinning black hole.

This collision of two black holes had been predicted but never observed.

The twin LIGO detectors are located in Livingston, Louisiana, and Hanford, Washington.

The LIGO observatories are funded by the US National Science Foundation (NSF), and were conceived, built and are operated by Caltech and MIT.

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Train from China to Iran stimulates Silk Road revival

Feb 15, 2016 0

By INE Wire Services

Tehran–First cargo train from China to Iran arrived in Tehran on Monday, indicating a milestone in reviving the “Silk Road”, which has opened a new chapter of win-win cooperation between China and Iran.

The train, also referred to as Silk Road train, passed through Kazakhstan and Turkmenistan to Iran, travelling a distance of 10,399 kms. It had left Yiwu city in east China’s Zhejiang province on January 28, Xinhua reported.

The ancient ‘Silk Road’ is back in business as new train connects China to Tehran (Photo courtesy: AFP)

The ancient ‘Silk Road’ is back in business as new train connects China to Tehran (Photo courtesy: AFP)

This train was carrying dozens of cargo containers, according to the deputy of Iran’s Road and Urbanism Minister Mohsen Pour-Aqaei, who made a welcome speech after the arrival of the cargo train at Tehran Train Station on Monday.

Ancient Silk Road trade route had served as an important bridge for East-West trade and brought a close link between the Chinese and Persian civilisations.

The “Belt and Road” initiative was raised by Chinese President Xi Jinping in 2013, which refers to the New Silk Road Economic Belt, linking China with Europe through Central and Western Asia, and the 21st Century Maritime Silk Road, connecting China with Southeast Asian countries, Africa and Europe.

“To revive the Silk Road Economic Belt, the launch of the train is an important move, since about 700 kms of trip has been done per day,” said Pour-Aqaei, who was present at the welcome ceremony of the train in Tehran’s railway station.

“Compared to the sea voyage of the cargo ships from China’s Shanghai city to Iran’s Bandar Abbas port city, the travel time of the train was 30 days shorter,” he said.

Pour-Aqaei, also the managing director of Iran’s Railway Company, added that according to the plan, there would be one such trip from China to Iran every month.

The travel of cargo train from China to Iran is part of a Chinese initiative to revive the ancient Silk Road used by the traders to commute between Europe and East Asia.

Tehran will not be the final destination of these kinds of trains from China, the Iranian deputy minister said, adding that in the future, the train will reach Europe.

This will benefit Iran as the transit course for the cargo trains from the east Asia to Europe, he said.

Chinese ambassador to Iran Pang Sen said that as one of the cooperation projects after Chinese President Xi Jinping’s state visit to Iran, the cargo train is playing a important role to promote construction of the “Belt and Road” initiative.

Meanwhile, the railway line from Yiwu to Tehran provides the two countries an express and efficient cargo trade transportation method, Pang said, adding that the countries along the railway line will further upgrade rail technology with the aim to make its transportation ability faster and better.

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