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When the tender was opened last month, a Chinese joint venture firm -- CRRC Pioneer Electric (India) Private Limited -- had emerged as the only foreign player among the six contenders for the supply of electrical equipment and other items for the 44 train sets of 16 coaches each.
The move to cancel the tender is a big setback for China.
"Tender for manufacturing of 44 nos of semi high-speed train sets (Vande Bharat) has been cancelled. A fresh tender will be floated within a week as per Revised Public Procurement (Preference to Make in India) order," the Railway Ministry tweeted.
The Joint venture was formed between the China-based CRRC Yongji Electric Company Limited and the Gurugram-based Pioneer Fil-med Private Limited in 2015.
The railways is keen to ensure that a domestic firm takes the tender and once it was felt that the Chinese joint venture was a frontrunner for the project, it was scrapped, news agency PTI reported quoting unnamed sources. Though, there has been no official statement by the Railway Ministry.
The Indian Railways' Integral Coach Factory in Chennai had floated the tender for manufacturing 44 rakes or train sets of semi-high speed Vande Bharat Express trains on July 10. The other five bidders were the state-owned Bharat Heavy Electricals Limited, the Bharat Industries, Sangrur, the Electrowaves Electronics (P) Limited, the MEDHA Servo Drives Private Limited, and the Powernetics Equipment India Private Limited, according to the Railway Ministry.
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Earlier, when India and China were involved in a tense border stand-off along the Line of Actual Control (LAC) in Ladakh, the railways had scrapped a tender for thermal cameras meant for "COVID-19 surveillance" after Indian firms alleged that the tender specifications favoured a Chinese company.
In a violent face-off between India and China in eastern Ladakh in June, India lost 20 soldiers, while Chinese casualties were over 40, according to reports.
After the Galwan Valley clash India blocked 59 Chinese apps including TikTok, which had a massive user base in India.