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Beating the Dragon by innovation: Tiger needs a strong IPR regime

India consistently tops in innovation drivers such as ICT service exports, the quality of universities particularly in science and technology cluster. This science and technology cluster is an interesting parameter, these clusters are identified based on the locations of the inventors, authors appearing in the scientific journal articles.

Vijay Kumar Singh & Charu Srivastava

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A nation needs to have a strong and sustainable economy that does not wither away due to unknown circumstances. Given the current situation at the LAC with China, the common man is pompously advocating ‘ban Chinese products’ without knowing the fact that Chinese products particularly ‘technology’ constitutes a high percentage of the Indian market, for instance, almost 70% of the Indian smartphone market is constituted by Chines Brands namely Vivo, OPPO, Xiaomi etc, mobile chips, TV screen, hardware, fixtures, electronics and everything that we use in our daily life comes from China. The giant Chinese tech companies namely Alibaba, Tencent, ByteDance have invested enormously in Indian startups including PayTM, Swiggy, Policy Bazar, Oyo, Ola, Snapdeal, Udaan and many more. According to the United Nations COMTRADE database on international trade, China imports to India is worth $18.85B US Dollars.

While there is a movement on ‘banning chines products’, it appears more of a sentimental call rather than a well thought of strategy. It is important to realize the success factors behing the Chinese markets, to learn from the strategy that China is focusing on to become a superpower and dominate the global markets. One thing which stands out prominently is the focus of China on technology, innovation and R&D. Investment in technology-driven industries will lead us to become ‘Aatmanirbhar’.

The innovation and technology are a quintessential mechanism to boost the GDP of a nation which is in turn is dependent upon the modern intellectual property system in establishing an enabling environment for knowledge as well as technology-based economic development. Intellectual Property regime has immensely affected the socio-economic condition of a nation by propelling cultural, technological, and economic development. IPRs play a dual role, earlier they were recognized to reward the creator/inventor however in the modern time, they came to be recognized as a tool to spur economic growth of the countries.

Several reports across the globe reveal that the IPR intensive industries result in higher revenue, massive job creation, increase of international competitiveness, quality services, and higher wages. A study in 2019 [IPR-Intensive Industries and Economic Performace in the European Union] documented that almost 45% of the economic output and 30% of the jobs were generated by the IP intensive industires. In Ireland, 65% of the total GDP comes from the IP intensive Industries.

The contrast between the developing and developed countries can be studied in the light of their IP mechanism. The statistical analysis shows that the number of registered patents along with increased technology and innovation capacity, lead to greater FDI inflows. A study by OECD (2003) concluded that the IP rights particularly patents have a positive correlation with FDI and trade.

 Reference to a few significant and exhaustive reports can be made to understand the importance of innovation and technology for an economy. The US Chamber released the 2020 International IP Index report which assessed the IP framework of 53 global economies that contributes 90% to the global GDP. The Index shows cross country analysis based on 50 unique indicators including education, innovation, infrastructure, R&D etc. which reflect the effectiveness of the IP regime in an economy. Few countries like Switzerland, Sweden, the US remain to be the most innovative whereas the intriguing thing is to look at the performance of China.

As per the report, China has been increasingly becoming technology and innovation dependent and focusing on higher valueadded knowledge and high tech advanced manufacturing. For over the past 15 years, China has increased its service sector by 25%, growing from 41.18% of GDP in 2004 to 52.16% of GDP in 2018 and decreased its industrial production and manufacturing.

 Similarly, there is a massive increase in the number of patent applications from China [Patent Cooperation Treaty (PCT)] which is almost equal to the number of applications filed from the US in 2018., i.e. 53,345. China has the largest number of science and engineering graduates in the world and as a percentage of GDP, China invested 2.13% in R&D in 2017. However, China fails at several important indicators such as failure to address trade disputes and lack of adequate IP enforcement. Both China and India come under Asia but China features in Upper Middle-Income economies whereas India comes in Lower Middle-Income economies. The index score of both countries has increased with time. China ranks 28 on the index and India ranks 40 out of 53 economies. Another interesting report comes from the WIPO annually, known as Global Innovation Index [GII] which ranks the innovation performance of 130 economies. As per the 2019 report, China tops in the Upper Middle economy.

India’s rank has improved significantly from 81 in 2015 to 52 in 2019 and continues to be the most innovative economy in Central & Southern Asia. India consistently tops in innovation drivers such as ICT service exports, the quality of Universities particularly in science and technology cluster. This science and technology cluster [S&T] is an interesting parameter, these clusters are identified based on the locations of the inventors, authors appearing in the scientific journal articles. The data is taken from the Patent applications. The United States hosts the maximum no. of clusters [46] followed by China [18], Germany [10], France[5] and so on. Compared to last year all the Chinese clusters moved up in ranks. This reflects the improvement and development in innovation sector and scientific publications by Chinese entities.

 Looking at the overall performance of the economies the report states that there is a shift in the gloral R&D trend, now it is not only the high-income economies carrying out R&D. In 2017, the share of high-income economies accounted for only 64% of global R& D whereas in 1996 they contributes 87% of global R & D.

Amongst the uppermiddle-income economies, China has increasingly contributed more in R& D as compared to other countries. In 1996, China contributed only 10% of the global R&D expenditures, whereas in 2017 it is 31%. China also continues to rise in the ranking from 17th in 2018 to 14th in 2019.

China remains the only middle-income economy in the top 30 and maintains top rank in high tech net imports and creative good imports.

The cumulative contribution of the Asian countries particularly China, Japan, Republic of Korea and India has also improved from 22% in 1996 to 40% in 2017 of the world’s R&D. Out of this 40%, China contributed the maximum which was 24% in 2017 as compared to only 2.6% in 1996.

Globally, if we look at different nation, one can easily decipher that different nations project their aspirations with different nomenclatures, such as ‘A Nation of Makers’ [USA], ‘Design in Innovation’ [UK], ‘Made in China 2025’ [China],’ Smart Nation’ [Singapore], ‘Made in India’ [India], ‘Creative Economy’ [Republic of Korea], ‘Thailand 4.0’ [Thailand] and so on, but one thing that is common across these economics is the shift towards the service and technology-based industries.

Where does a country stand in the Global IP index reveals a lot about its economy. Such as though on several parameters, India positions in the top of the raking amongst the lowerincome economies but globally we need to push ourselves a lot.

Starting with the education system, the learning has to be more outcomebased with an emphasis more on the ‘creation’ rather than just the ‘knowledge’ aspect. Every year thousands of Ph.Ds are awarded but how many of them are converted into a product or a system which can be applied industrially is the moot question. Innovation is a mindset which needs to be developed.

Although India stands third in the list of holding the largest group of scientists and technicians in the world as per the report and is predicted to be the largest supplier of the university graduate by this year, it fails to feature in the top 25 in the innovation parameter, which raises serious doubt on our entire learning and education system.

Having said that, it is also true that Indian economy is heavily supported by a skilled workforce and the government policies and initiatives such as Digital India, Atal Innovation Mission, Make in India, Skill India and Startup India, strongly strive to transform the economy to adapt to technology and innovation which propels the rise in the living standard of the citizens and to position India at par with other strong economies.

According to an update by DIPP in 2018, in pursuance to the objectives laid down in the National IPR Policy, 2016, around 40+ additional IPR initiatives have already been designed to foster IP driven systems. Since the release of the Policy, India has made remarkable efforts in spreading awareness on the negative impact of piracy and counterfeits.

The US Chamber report also appreciated that India has passed a series of reforms strengthing IP enforcement, addressed administrative inefficiencies, courts have imposed hefty fines for infringement. It also stated that India has made progress since 2012 in combating copyright piracy by issuing dynamic injunction orders, increasing penalty for IP infringement, new pilot patent p r o s e c u t i o n h i ghway [PPH] programme and increased R & D in IP based industries.

However, in September 2019, a study by Music Industry along with Delloite stated that piracy in the Indian Music industry accounts to a loss of approximately USD 250 Million a year. Another interesting research published in Quartz India in 2018 estimated that one out of three Indians received counterfeit from shopping online.

Needless to mention that stong innovation environment requires a robust IP legal framework including protection and enforcement because it incentivizes the innovators to invest in R&D.

India has a long way to go in this direction, we not only have to improve our R&D but also to have an effective IP regime. There are several serious hurdles particularly concerning copyright, piracy, patent eligibility, opposition, enforcement, compulsory licensing, data protection, transparency in search and seizures by customs and related issues which need special attention. It is high time that understanding of IPR issues shall reach masses. People should be able to realize the value of intellectual property rights and the rhetorics of ‘ban Chinese products’ shall be replaced by ‘Creative India and Innovative India’.

 Dr. Vijay Kumar Singh is Dean and Charu Srivastava is Faculty at School of Law, UPES. Views are personal.

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Policy & Politics

PIYUSH GOYAL CALLS UPON STARTUPS TO LEVERAGE ‘DEEP TECH’

Goyal says start ups to build solutions for local & global markets: AI, IoT, Big Data, etc.

Tarun Nangia

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Piyush Goyal

The Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution, Piyush Goyal today called upon the Indian industry to aim for raising 75 unicorns in the 75 weeks to the 75th anniversary of Independence next year.

“We have added 43 unicorns added in 45 weeks, since the start of ‘Azadi ka Amrit Mahotsav’ on 12th March, 2021. Let us aim for atleast 75 unicorns in this 75 week period to 75thAnniversary of Independence,” he said, while releasing the NASSCOM Tech Start-up Report 2022.

Goyal said Startup India started a revolution six years ago and today ‘Startup’ has become a common household term. Indian Startups are fast becoming the champions of India Inc’s growth story, he added.

“India has now become the hallmark of a trailblazer & is leaving its mark on global startup landscape. Investments received by Indian startups overshadowed pre-pandemic highs. 2021 will be remembered as the year Indian start-ups delivered on their promise, – fearlessly chasing opportunities across verticals – Edtech, HealthTech & AgriTech amongst others,” he said.

Goyal lauded the ITES (Information Technology Enabled Services) industry including the Business Process Outsourcing (BPO) sector for the record Services exports during the last year. “Services Export for Apr-Dec 2021 reached more than $178 bn despite the Covid19 pandemic when the Travel, Hospitality & Tourism sectors were significantly down,” he said.

• “Let us aim for at least 75 unicorns in the 75 weeks to the 75th Anniversary of Independence”: Piyush Goyal

• Goyal lauds the ITES industry including the BPO sector for the record Services exports during the last year despite the pandemic

•  Piyush Goyal says the PM’s interaction with Startups a week ago has supercharged our innovators

• The next “UPI moment” will be the ONDC (Open Network for Digital Commerce) – Goyal

• New India is today being led by new troika of Innovation, Technology & Entrepreneurship (ITE), ‘India at 100’ will be renowned as a Startup nation: Goyal

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Subhas Chandra Bose statue to be installed in India Gate, announced PM Modi

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Prime Minister Narendra Modi announced on Friday that a grand statue of iconic freedom fighter Netaji Subhas Chandra Bose will be installed at India Gate. This announcement came ahead of the 125th anniversary of Netaji Subhas Chandra Bose. Prime Minister Narendra Modi announced that his statue will be installed at India Gate to honor his contribution to the independence movement.

The Prime Minister further said that Bose’s grand statue will be made of granite and will be a symbol of India’s indebtedness to him. “Till the grand statue of Netaji Bose is completed, a hologram statue of his would be present at the same place. I will unveil the hologram statue on 23rd January, Netaji’s birth anniversary” PM Modi tweeted

“At a time when the entire nation is marking the 125th birth anniversary of Netaji Subhas Chandra Bose, I am glad to share that his grand statue, made of granite, will be installed at India Gate,” PM Modi tweeted on Friday. “This would be a symbol of India’s indebtedness to him.”

The statue will be installed under the grand canopy near which the Amar Jawan Jyothi flickers in remembrance of India’s martyrs. The eternal flame, which has not been extinguished for 50 years, will be put off on Friday, as it will be merged with the flame at the National War Memorial.

The canopy, which was built along with the rest of the grand monument in the 1930s by Sir Edwin Lutyens, once housed a statue of the former king of England George V. The statue was later moved to Coronation Park in Central Delhi in the mid-1960s.

The announcement was hailed by many Bharatiya Janata Party (BJP) leaders, Union ministers and civil society members.

“Great news for the entire nation as PM @narendramodi Ji has today announced that a grand statue of Netaji Subhas Chandra Bose, will be installed at the iconic India Gate, New Delhi. This is a befitting tribute to the legendary Netaji, who gave everything for India’s freedom.” Amit Shah tweeted.

“Netaji is an epitome of India’s true strength & resolve. Congress has left no stone unturned to forget the immortal contributions of India’s brave son. PM @narendramodi’s decision to install Netaji’s statue at India Gate on his 125th Jayanti will inspire our generations to come.” Amit Shah added in his tweet.

The Prime Minister Narendra Modi will unveil a 216-foot statue of Ramanujacharya, a 11th century saint and a social reformer, in Hyderabad on February 5. The statue described as the ‘Statue of Equality is located in a 45-acre complex at Shamshabad on the outskirts of the city.

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‘US, India should set bold goals to attain $500bn target’, said Keshap

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Having achieved a huge success in their bilateral relations, two of the world’s greatest democracies – India and the United States of America should opt in favour of setting bold goals in order to take their relationship to a new high thereby achieving the ambitious target of $500 billion in bilateral trade echoes retired American Diplomat Atul Keshap, who recently became the new president of the US India Business Council (USIBC).

“I think it’s vitally important that we show that democracies can deliver; that the United States and India can be a driver of global growth and a model for prosperity and development in the 21st century,” Keshap said.

During his illustrious career, the veteran diplomat has served in various capacities with the US State Department. He has been the US Ambassador to Sri Lanka and the Maldives and has also served as the Principal Deputy Assistant Secretary of State.

In 2021, he took over as the Chargé d’affaires of the United States mission to India and has been instrumental in shaping the US-India ties under the Joe Biden administration.

“I feel it’s critically important that we show that open societies powered by a free enterprise can be relevant for their people and can help power the world out of this pandemic. I tend to agree entirely with President Biden and PM Narendra Modi that the US India Partnership is a force for global good and it’s going to have a huge impact on economic growth,” he said.

Keshap feels that USIBC is the podium where he can give his best and help the people from both countries. “We need to move forward on the global trade agenda. We need to ensure the prosperity of the future, especially after this pandemic,” he said.

The 50-year-old diplomat reflected on the vision set by Biden, about potentially having a $500 billion trade in goods and services between the US and India. “That’s a very ambitious number and I believe in it. It is a great idea to try to have ambitious targets, else we are on a standstill” he said.

Having donned the new role recently, Keshap said he wants to help meet that $500 billion bilateral trade goal. “This is where the government and the private sector have to work together hand-in-hand,” he said.

“We have to articulate the benefits and have to convince all our stakeholders that there is value in lowering trade barriers, in creating strong standards and in creating positive ecosystems. There is value in dealing with small technical issues that might be creating a blockage to greater prosperity between our countries,” Keshap said.

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Coal crisis: How private sector can power India’s growth

Tarun Nangia

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India has been reeling under a coal shortage crisis and the situation got aggravated in October 2021 leading to a lot of concern amongst various stakeholders including government bodies, thermal power plants, industry and investors. The shortages, triggered by global factors, of course with Indian peculiarities, threatened supplies to thermal-based power plants, leading to an alarm.

Recovering from Covid-19-induced reverses, the global economy has rebounded and gathered steam. This was one of the prime reasons why there was an acute shortage of coal and sources of energy, worldwide. Global coal prices have risen by 40 per cent.

Port based Indian power plants normally rely on imports. Given the global conditions, and the sharp rise in coal prices internationally, the power plants are now almost solely dependent on Indian coal. It’s in this context that the coal crisis has been amplified by various stakeholders.

While global factors did contribute, did we fail to take necessary action, over a period of time? To highlight one prominent factor: Why should the Coal India Limited have monopoly over coal mining / supplies? Consider the CIL performance in the last few years: Its output was 606 MT in 2018-2019, 602 MT in 2019-2020, and 596 MT in 2020-2021. Contrast this with various governments’ efforts to ramp up Coal production in the 1992-2010 period.

So, why did Coal India Limited fail to expand capacity? This is one big question that must be debated. It can therefore be argued that CIL’s monopoly on coal extraction and supplies (till very recently) is one of the prime reasons why India’s thermal power plants faced a coal crisis.

India has the world’s fourth-largest coal reserve, with around 300 billion tonnes of coal. But it is also true that it imports approximately 250 million tonnes of coal. This is because we don’t mine enough and use our resources optimally.

CIL supplies 80 per cent of India’s coal needs. The demand for coal in India is nearly a billion tonnes a year, and the supply is below 800 million tonnes.

Unfortunately, based on then CAG Vinod Rai’s miscalculations and the Notional Loss theory, the Supreme Court cancelled 214 coal blocks in September 2014. Private players were not given a patient hearing on the issue. Rather than encouraging them, the private sector got punished unfairly for its efforts to strengthen the economy through coal mining. If 100 out of 214 of those mines were functional and each one was producing, say, 4 mtpa of Coal, India today would be a net exporter, not importer, of Coal.

Rai’s theory and the Supreme Court judgment had devastating consequences. The coal production in the country took a hit. The country’s GDP declined by almost 1 per cent. Millions of jobs were lost. NPAs of banks with exposure to power, steel and mining sector rose exponentially. Such is Rai’s credibility that he recently tendered an apology to a Congress leader, who, Rai claimed in his book, “requested him to remove then PM Manmohan Singh’s name from the coal scam”. Taking a cue, if someone sues Rai for his Coal Scam theory and numbers, would he be able to defend his report in court?

Against the recommendations of CAG of incentivizing good performers who produce coal, the Supreme Court imposed an additional levy of 295 rupees per ton on the coal extracted from operational mines retrospectively from 1993. The private miners were directed to deposit more than Rs. 9000 crore as penalty.

The stagnating CIL coal output should be seen in this background. Being a monopoly, CIL could have been a saviour for the nation. CIL however neither ramped up production nor invested in technology or expansion of new mines.

In 2020, in a bold and much welcome development, the Union Government opened up commercial coal mining, thus ending Coal India’s monopoly. PM Modi said that he wanted India to be a net exporter of coal, as he set ambitious targets.

A lesson from the recent crisis is this – the CIL monopoly, along with the no-entry sign for the private sector, harmed the country.

There are lessons to be drawn from the opening up of the aviation sector for the recent coal crisis episode. With a series of measures, the aviation sector was opened up, with the Air India privatisation being the latest example. The economy, the nation and consumer benefitted. When sectors as diverse as Steel, Infrastructure and Healthcare were unshackled, the end consumer, the economy and the nation benefitted.

Similarly, if the private sector in coal mining would have been encouraged consistently, and ill-advised measures like cancellation of coal blocks not taken, the coal situation would not have come to such a pass. In 2014, the private sector was said to be accounting for 90 million tons of coal – a substantial figure. Instead of getting encouraged, the private sector had to fight protracted court cases and spend its time wastefully.

There’s a consensus that Coal would continue to power economic growth for a country like India for the next two decades. It’s important that this abundantly-available natural resource is used optimally. The Private Sector can play a key role here.

The Government has shown intent and commitment. It’s time for all the stakeholders to ensure that the country faces no shortage of Coal hereafter. It’s time we all learnt our lessons and ensure that Coal and Mining booms and fires India’s growth march.

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eGrocers seize the day as orders rise 40% amid third wave

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In the ongoing third wave of Covid-19 one industry tops it all with high revenue generation based on more than enough orders to double their size of operation. eGrocers are riding the Corona wave high with record number of orders rising in the third wave and inevitably increasing the rate of their operations. Since December the online grocer Blinkit has added 200 “dark stores” that are designed only for deliveries in ten minutes.The company now plans to take the number to 1000 by March. Reliance owned MilkBasket is more than doubling its warehousing capacity to almost 350,000 sq ft in NCR to cater to 1,50,000 orders a day, double the current order size. In the midst of the growing Covid-19 cases while the brick and mortar retailers and dine-in restaurants are holding out on their expansion plans, online grocers like Blinkit and MilkBasket are going all out on aggressively pushing to take advantage of the growing demand for quick online deliveries. Even at the time of the first and second wave the online grocers had been in the works to expand their operations as millions of Indians gravitated to digital commerce. However the ongoing third wave has made the push on market capitalisation more aggressive and ambitious. “One thing has changed in this wave that our pace of expansion has doubled,” said Rohit Sharma head of supply chain at Blinkit.

The main rival of Blinkit, Tata owned BigBasket is planning to launch BB Now, its express delivery service of delivering products in 10-20 minutes, joining the growing space of quick commerce. Currently Blinkit, Swiggy’s Instamart, Dunzo and Zepto are active in that space. T K Balakumar, chief operating officer at Big Basket said his company is planning to increase its existing warehousing capacity by 40%. They are also planning to open more than 300 dark stores in the coming financial year starting April.

During the ongoing Covid wave the orders in various cities have gone up by 30-40%, said the online grocers. Milkbasket is currently catering to about 70,000 orders per day in the NCR. Its new 150,000 sq ft warehouse in the region will be ready by next month. “There is excess demand. They are already running 110% of capacity,” said a person familiar with MilkBaskets’ plans. MilkBasket operates in Delhi-NCR, Hyderabad, Bengaluru and Chennai and is set to enter Jaipur later this month.

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India-assisted projects launched for Mauritius by PMs Modi and Jugnauth

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During a virtual event on January 20, Prime Minister Narendra Modi and his Mauritius counterpart Pravind Kumar Jugnauth jointly opened an India-assisted social housing project in Mauritius. The two leaders also opened a civil service college and an 8-MW solar power project in Mauritius, both of which are being funded by India, as per the external affairs ministry. According to the ministry, a bilateral agreement for the implementation of modest development projects was exchanged, as well as an agreement to grant a $190 million line of credit from India to Mauritius for the Metro Express Project and other infrastructure projects. The news follows Chinese Foreign Minister Wang Yi’s tour to Indian Ocean countries like Sri Lanka, Comoros, and the Maldives, during which the Chinese side disclosed a number of business initiatives. Mauritius is an important aspect of India’s “Neighbourhood First” strategy, with New Delhi supporting a variety of projects in the African island nation. India supplied immunizations and medical supplies to Mauritius during the initial stages of the Covid-19 outbreak.. Last February, India, and Mauritius signed a free trade agreement aimed at making the island nation a regional center for Indian investments, and New Delhi offered a $100 million line of credit to cover defense gear purchases. Both governments decided to lease a Dornier plane and a Dhruv advanced light chopper to monitor Mauritius’ exclusive economic zone at the time.The Comprehensive Economic Cooperation and Partnership Pact (CECPA) between India and Mauritius was the country’s first free trade agreement with an African nation.

METRO EXPRESS PROJECT

PM Modi and his Mauritian counterpart Jugnauth jointly launched phase-I of the rail transportation line between India and Mauritius in 2019. The Light Rail Transit System Project represents a watershed moment in Indo-Mauritian ties, delivering significant economic benefits to both countries. In addition, the project provided engineering and technical skill development possibilities for the island nation. According to Rajeev Jyoti, Chief Executive of L&T, the construction company that won the contract from the Government of Mauritius, the large-scale investment also established India’s credibility in the international railway market. The first phase comprised the construction of a 26-kilometer railway with 19 stations connecting Curepipe and Immigration Square in Port Louis. Two of the stations were described as cutting-edge. Three major bus interchanges are included in the alignment, making it a multi-modal urban transit system. The bilateral flagship program was expanded in June 2021 with the start of phase-II, which runs from Rose Hill to the Quatre Bornes sector. PM Modi and PM Jugnauth jointly inaugurated the Metro Express corridor, “providing a safe, secure, dependable, and efficient method of transit in Mauritius,” according to the Indian embassy in Mauritius. Three major bus interchanges are included in the alignment, making it a multi-modal urban transit system. The bilateral flagship program was expanded in June 2021 with the start of phase-II, which runs from Rose Hill to the Quatre Bornes sector. PM Modi and PM Jugnauth jointly inaugurated the Metro Express corridor, “providing a safe, secure, dependable, and efficient method of transit in Mauritius,” according to the Indian embassy in Mauritius.

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