Now, why would anyone weaponise construction equipment? Because TBMs are the photolithography machines of construction and only a handful of firms worldwide can make more than a few tens of them every year. Every major infrastructure project depend on them. A standard TBM costs about USD 20 million. The price rises roughly with diameter and the cost can range between USD 10 million to USD 100 million.
Squeezing a growing economy
A similar scenario happened in late 2024. TBMs made by a German firm Herrenknecht’s China unit for Indian projects were held up at Chinese customs. That was an informal squeeze. The new announcement formalises such restrictions. The design of these controls matters more than the list. Exports to sensitive countries and regions that have disputes with China now need a licence. The notice names no country, but India, with its unresolved boundary dispute with China, is obviously a major target. Exports to everyone else can go ahead after registration, but the exporter and the end user must promise not to pass the machines on to those disputed countries. Organisations outside China are also barred from transferring China-origin items without a licence.
Not Only Chinese Manufacturers
These controls apply not just to Chinese manufacturers but to any company exporting from China. This includes foreign firms using the country as a production base. German or Japanese TBM makers manufacturing in China must now seek Beijing’s permission before shipping, making Chinese factories a liability for companies serving India.
The restrictions on high-altitude shotcrete machines are equally significant. Equipment designed for operations above 3000 metres is essential for Himalayan tunnelling and road construction. Indian projects may face short-term delays, but the long-term outlook is positive. Herrenknecht, a global leader, already manufactures TBMs at its Chennai plant, including two of the largest machines ordered for Mumbai’s Versova-Dahisar Link Road. Beijing’s move strengthens the case for expanding manufacturing capacity in India, benefiting equipment makers and their component suppliers.
Mispricing The Risk
Analysis of trade data shows that India has already been diversifying its TBM imports away from China since 2020. These controls will speed that up. China’s reliability as a business partner is waning. India must attract relocating manufacturers through predictable approvals, reliable power supply and faster customs clearance for imported components.
The author is a public policy researcher at the Takshashila Institution. This post was first published on the Takshashila Institution’s blog.
