China Curbs Tunnel Boring Machine Exports: Why India Is Pushing to Make Its Own Construction Equipment
China announced new export controls on tunnel boring machines (TBMs) on October 19. They take effect on November 18. Chinese exporters will now need a licence under China's dual-use export control system (rules for goods that have both civilian and military uses).
The controls also cover walking excavators and plateau-type wet shotcrete machines (machines that spray concrete onto tunnel walls at high altitudes). China says the step protects its national security and interests.
This matters to India because some TBMs used in Indian projects, such as the Mumbai-Ahmedabad bullet train corridor, were made in China, even when the company owning the technology was German. Chinese customs delays had already held up such machines in 2024.
At the same time, the Centre is close to approving a roughly $1.2 billion incentive scheme for making construction and infrastructure equipment in India. It was announced in the Union Budget 2026-27 and aims to attract about $1.8 billion of fresh investment over seven years.
An industry study puts overall local manufacturing (localisation) in Indian construction equipment at about 50%. Key parts such as hydraulics (systems that use liquid pressure to move heavy arms), electronic controls and undercarriages are still mostly imported.
China's Export Control Law, 2020 and the Dual-Use Items Framework
China's Export Control Law is the main law that decides which goods, technologies and services can leave China, and on what conditions. It covers military goods, nuclear goods and dual-use items, which are things that have both civilian and military uses. A company that wants to export a listed item must first get a licence from China's Ministry of Commerce (MOFCOM). This lets the Chinese government slow down or stop sales to any country it chooses.
The TBM curbs are a fresh use of China's dual-use licensing system. They show how a supplier country can use export licences as pressure, even on heavy civilian machinery that a buyer like India needs for railways and metro tunnels.
Tunnel Boring Machine (TBM) Technology
A tunnel boring machine, or TBM, is a giant machine that digs a round tunnel and lines it with concrete at the same time. A rotating cutting wheel at the front grinds the rock or soil, while the back of the machine fixes concrete rings to the tunnel wall. TBMs are used for metro rail, railway, road, water and hydropower tunnels, especially under cities and under water, where blasting is unsafe.
Because TBMs are huge, custom-built and made by very few companies worldwide, any block on exports from China can delay India's tunnelling projects. This is why TBMs are one of the main targets of India's new equipment incentive scheme.
Capital Goods Sector and India's Industrial Policy
Capital goods are the machines that a country uses to make other things. A tractor factory needs machine tools to cut metal. A metro project needs tunnel boring machines and cranes. A power plant needs turbines and boilers. These "machines that make things" are called capital goods, and the industry that produces them is called the capital goods sector. It is often described as the "mother of all industries", because every other factory, road, railway and power plant depends on it.
China's curbs on tunnel boring machines show the security side of the capital goods sector: a ban on one type of machine can slow a national rail project. The proposed $1.2 billion construction equipment scheme is India's answer, but its success depends on building components like hydraulics and controls in India, not just assembling imported parts.
- China's TBM export controls: announced October 19, 2026; effective November 18, 2026; also cover walking excavators and plateau-type wet shotcrete machines
- China's Export Control Law: in force December 1, 2020; Dual-Use Items Regulations in force December 1, 2024
- Proposed Indian incentive scheme: about $1.2 billion over seven years; target of about $1.8 billion in new investment; announced in Union Budget 2026-27
- India's mining and construction equipment demand: about $17 billion in 2025, growing 10-12% a year (industry study)
- Overall localisation in construction equipment: about 50%; backhoe loaders 85-90%; excavators 55-60%
- India's mining and construction equipment exports: about $4.9 billion in 2025, nearly triple a decade earlier
- Global mining and construction equipment market: about $420-440 billion; India's share of global imports demand below 4%
- India's tunnelling machinery imports from China: $18 million (2022-23) to $800,000 (2025-26)