Issue of Tunnel Boring Machine Curbs Should Not Strain Ties: Chinese State-Media Outlet GT, Pg15

Key Highlights:

• China's Ministry of Commerce announced new export restrictions on tunnel boring machines (TBMs), rare earth magnets, and capital goods/technology for the solar sector.
• These restrictions, requiring export licenses for dual-use items, are set to come into effect on November 18.
• Chinese state-media outlet Global Times stated that applications for "legitimate civilian projects" would be approved and urged that the issue should not strain bilateral ties.
• India's Commerce and Industry Minister Piyush Goyal affirmed that India would develop its own TBM manufacturing capabilities if exports were restricted.
• This move follows previous instances of China imposing licensing mechanisms on key exports, such as rare earth magnets, which previously disrupted the Indian automobile industry.

Detailed Insights:

• The export restrictions are implemented under China's Export Control Law and its regulations concerning dual-use items, which cover goods with both civilian and military applications.
• India has previously faced supply chain disruptions, notably with rare earth magnets essential for its automobile sector.
• In response to such pressures, the Indian government has initiated measures to bolster domestic manufacturing and reduce import dependence.
• The Union Cabinet approved a ₹7,280-crore scheme to promote the manufacturing of sintered rare earth permanent magnets (REPM), aiming to establish a 6,000 MTPA domestic capacity.
• India is also preparing a Production-Linked Incentive (PLI) scheme for polysilicon manufacturing to strengthen its solar energy value chain.
• TBMs are crucial for India's infrastructure development, including metro rail, road, and railway tunnel projects.
• Rare earth magnets are vital components for electric vehicles, wind turbines, advanced electronics, and defense applications.
• Polysilicon is a fundamental material in solar photovoltaic cell manufacturing, a sector where India heavily relies on imports.
• Such export controls are often viewed as a "weaponisation of supply chains," where economic dependencies are leveraged for geopolitical objectives.

Key Concepts Involved:

• Tunnel Boring Machine (TBM): A machine used for excavating tunnels through various geological conditions, offering a faster and less disruptive alternative to traditional drilling and blasting.
• Dual-use items: Goods, technologies, or services that possess both civilian and military applications or can contribute to military potential.
• Rare Earth Permanent Magnets (REPM): High-strength magnets made from rare earth elements, indispensable for high-efficiency motors, generators, and electronic devices.
• Production-Linked Incentive (PLI) Scheme: A government initiative designed to boost domestic manufacturing by providing incentives on incremental sales over a base year.