Yes, you are correct. That's a wise strategy for both China and India. Logistics is the foundation of economic development. A mixture of freight and passengers train on the major corridor is a disaster.
Five years ago, I mostly traveled on the old line and saw a lot of freight trains waiting at some midway stops, what a waste! Now, from Wuhan(my hometown in the very centre of China) to Shanghai/Beijing/Guangzhou/Chengdu/Xi'an, all major cities around China, there are a dedicated passenger route(day-time HSR and overnight HSR Sleepers) and an old route(freight and overnight normal trains). That is the initial purpose. Then there follows with huge positive impacts on society and economy, which is impossible to measure by money. If everything goes with how much a railway can earn, it is certainly narrow-minded.
Seperating old lines and dedicated passenger lines
Guangxi, Western China
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One of the reports focused on HSR of China(CRH) conducted by World Bank
Regional economic impact analysis of high speed rail in China : Main report (English) | The World Bank