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The two units circled in red can't do rail move whereas they are on a rail line. Not connected to India but still on a rail line.
Other Indian units are working fine.

Those are the real railroads at the time. It is correct.

Yes but is it logical that units can't do rail moves on top of them?

There are 3 roads that doesn't allow them to move. They didn't have much there.

Sorry but I don't understand. In China, rail move is possible when rail lines are there.

Why I can't use this rail line?

I see why. It is because of the supply mechanic. It is using main supply which means that rail line has a lower than 9 supply level. Which means no railing.

Im going to leave it as is because that theater is fairly well balanced at the moment. It's how the rules go.

I agree. Just one thing, is there a logical historical reason why these Burma hexes are already occupied by Japan at the start of the game?

This is helping the Japanese to rail troops to storm Rangoon very quickly.

In March 1942 only, Japan seized control of the lower region of Burma by taking the city of Rangoon.

Fixed with Beta 5.4, thanks.