China to restrict exports of giant tunnel-digging machines; why India could be affected

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China is tightening export controls on construction equipment, including tunnel-boring machines, in a move that could affect India's infrastructure projects and add to concerns over its dependence on Chinese machinery. The new restrictions cover specialised equipment used to build tunnels for roads, railways and metro networks, as well as machines designed to spray concrete at high altitudes. Beijing has cited the potential military as well as civilian applications of such equipment, warning that "sensitive countries and regions with disputes with China" will face stricter export rules, Bloomberg reported. The curbs are particularly significant for India, which is among China's major customers for tunnel-boring equipment and is expanding road and railway infrastructure along the Himalayan border. The two countries have a longstanding territorial dispute in the region, where India has been building connectivity infrastructure to reduce the time required to mobilise troops. The latest restrictions are due to take effect later this month, according to Bloomberg. They also cover components, raising concerns not only about fresh procurement but also the maintenance of machinery already in use. Kyle Chan, a fellow at the Brookings Institution, said Beijing increasingly viewed its position as a major global construction equipment producer in strategic terms. "It raises the risks of dependency, and incentivizes other countries to try to de-risk from China," Chan said.

Why the restrictions matter for India

China accounts for around 70% of the global tunnel-boring machine market, according to Chinese state media figures cited by Bloomberg. Its leading manufacturer, China Railway Engineering Equipment Group Co Ltd, says its machinery is used in 36 countries, including Denmark and France. India has previously faced delays in procuring Chinese-made tunnelling equipment. In 2024, China delayed efforts by German manufacturer Herrenknecht AG to sell tunnel-boring machines to India for projects including the Ahmedabad-Mumbai bullet train and the Delhi Metro. A spokesperson for Herrenknecht said the company was studying the latest Chinese restrictions. The new controls could also affect the supply of spare parts. Ajay Srivastava, founder of the New Delhi-based Global Trade Research Initiative, said India could shift equipment between priority projects if necessary, but restrictions on components could create difficulties for existing machinery. "When there is heavy wear and tear in these machines we require regular supply of parts," Srivastava said, adding that the curbs could affect both the existing stock of machines and the procurement of new ones. The inclusion of equipment used for concrete spraying at high altitudes has also drawn attention. Sun Chenghao, a fellow at Tsinghua University's Center for International Security and Strategy in Beijing, said this could indicate a particular focus on "strategically sensitive terrain". "For China, the central concern is where Chinese engineering capabilities are used and whether they could strengthen another country's military infrastructure," Sun said.

India looks to reduce dependence on Chinese machinery

The restrictions come as India seeks to expand domestic manufacturing of high-value construction and infrastructure equipment. The government is considering a $1.2-billion incentive scheme for manufacturers of equipment such as tunnel-boring machines, firefighting systems and elevators. The proposed programme is expected to attract around $1.8 billion in fresh investment by offering incentives to domestic manufacturers over seven years. It is also expected to include local value-addition targets for machinery that is currently imported. The scheme was announced in the 2026-27 Union Budget as part of efforts to strengthen domestic production of technologically advanced construction and infrastructure equipment. State-run BEML, along with private-sector companies such as Larsen & Toubro and Johnson Lifts, could benefit from the proposed incentives, according to the earlier report. India's infrastructure expansion is expected to drive demand for specialised equipment. Road transport and highways minister Nitin Gadkari has said the country aims to invest up to $9.6 billion in tunnelling over the next five years and has urged domestic industry to manufacture tunnel-boring machines.

Domestic manufacturing faces cost challenges

Larsen & Toubro, one of India's major engineering companies, is working on developing its own tunnel-boring machine. R Shankar Raman, president of the Mumbai-based company, said L&T was building a prototype and could eventually manufacture machinery for its own projects and other buyers if the experiment proved successful. However, he cautioned that India's manufacturing industry was still at an earlier stage, while Chinese manufacturers benefited from large-scale production. "If people are still going to compare with Chinese price and find ways to import from China," Raman said, "then India will be at a disadvantage." Bloomberg Economics said the restrictions could slow some infrastructure projects, including strategic construction along the disputed Himalayan border. However, it also noted that tighter Chinese export controls could strengthen India's case as an alternative manufacturing base, encouraging foreign equipment makers to add capacity in the country. Besides Herrenknecht, manufacturers in the US and Japan also produce potential alternatives to Chinese tunnelling equipment. However, switching suppliers in the short term could be difficult for customers that rely heavily on Chinese machinery.