New Delhi/Beijing: China has found a new way to use its power over world trade. After rare earths, it is now putting limits on construction machines, including giant tunnel-digging machines. India is one of its biggest customers.
What Is China Doing?
China has announced new export controls on construction equipment. The rules will start later this month. They cover tunnel-boring machines, which are huge machines that dig tunnels for subways, roads and railways through mountains. They also cover machines that spray concrete at high altitudes. The controls apply to spare parts as well.
China says these machines can be used for both civilian and military work. It also said that “sensitive countries and regions with disputes with China” will face stricter rules.
Why Does India Worry?
Many people in India think those words point toward them. India and China share a long Himalayan border, and tension flared there again just last week. India is building new roads and railway lines in the area so its soldiers can move faster. These projects need many tunnels.
China is the world’s top seller of tunnel-digging machines. State media says it has about 70 percent of the global market. Its top maker, China Railway Engineering Equipment Group, says its machines are used in 36 countries, including Denmark and France.
China has used this power before. In 2024, it delayed a plan by the German company Herrenknecht to sell tunnel machines to India. Those machines were meant for projects like the Ahmedabad-Mumbai bullet train and the Delhi metro. Herrenknecht makes some of its machines in China. A spokesperson said the company is studying the new rules.
What Do Experts Say?
Bloomberg Economics said the rules could slow some projects, including building near the disputed border. But it also said the rules could help India in the long run. Foreign machine makers may want to build factories in big markets like India.
Kyle Chan of the Brookings Institution said Beijing now sees construction equipment as a strategic matter. He said this makes depending on China riskier and pushes other countries to look for other suppliers.
Sun Chenghao of Tsinghua University said the high-altitude machines suggest China is paying close attention to “strategically sensitive terrain.” He said China’s main worry is whether Chinese engineering could help build another country’s military facilities.
Ajay Srivastava of the Global Trade Research Initiative said India could move machines from other sites to a “priority project.” But the spare parts rule is a problem. These machines wear down and need new parts often, so both old and new machines could be affected.
Can India Make Its Own?
Switching suppliers is not easy in the short run. Companies in the United States and Japan make similar machines, and in time they could gain from China’s rules.
India also wants to build its own. Road Transport Minister Nitin Gadkari said India plans to spend up to $9.6 billion on tunnels over the next five years. He asked Indian companies to make tunnel-boring machines. Reports say the government may offer a $1.2 billion plan to help makers of construction equipment.
R. Shankar Raman of Larsen & Toubro said his company is building a test machine. If it works, the company may make its own machines and sell them to others. But he warned that China makes them in huge numbers and at low prices. If buyers keep comparing with Chinese prices, he said, India will be at a disadvantage.
What Next?
For now, India has few quick options. Over time, the new rules may push India and other countries to build their own machines.
