Tunnelling through, Pg8

Key Highlights:

• China's Ministry of Commerce and General Administration of Customs have placed Tunnel Boring Machines (TBMs) and other construction equipment on an export control list.
• The new controls, effective from November 18, require export licenses for shipments to sensitive regions and registration for other countries.
• India, a major importer of TBMs, faces potential supply chain disruptions and increased costs for critical infrastructure projects like the Mumbai-Ahmedabad high-speed rail project.
• China dominates the global TBM market, holding approximately 70% share, and is leveraging this position to counter Western technological restrictions.

TBM Export Control.jpg

Detailed Insights:

• The export controls also cover walking excavators and high-altitude wet shotcrete machines, impacting a range of construction activities.
• For countries deemed sensitive, exporters will need an export license, while others require registration, an export certificate, and end-use declarations.
• India has experienced TBM-related delays from China for at least two years, highlighting a vulnerability in its supply chain diversification.
• Western TBM manufacturers often rely on Chinese component supply chains, making the issue complex even for non-Chinese equipment.
• TBMs are highly complex and project-specific, requiring custom configuration based on geological characteristics.
• India may need to procure TBMs from countries like Germany or Japan, potentially incurring higher capital costs.
• The BEML experience underscores the need for secure licensing and sustained demand for successful manufacturing partnerships in India.
• India should focus on developing domestic manufacturing capabilities through international partnerships and shared industrial infrastructure.
• Beijing's strategy involves identifying sectors of global dominance to establish export controls, mirroring Western restrictions on advanced technologies like semiconductors.

Key Concepts Involved:

• Export Controls: Government restrictions on the export of certain goods or technologies, often for national security or foreign policy reasons.
• Supply Chain Diversification: Strategies to reduce reliance on a single source or region for critical components or goods to enhance resilience.
• Tunnel Boring Machines (TBMs): Complex machines used to excavate tunnels through various soil and rock strata.
• National Champions: Large, often state-supported, domestic companies promoted to achieve global competitiveness in specific industries.