China’s latest export controls could complicate its economic rapprochement with India. On October 19, Beijing announced export controls on strategic heavy construction and engineering machinery – including tunnel-boring machines and walking excavators – with tougher licensing requirements for destinations involved in disputes with China.
For India, whose metro and high-speed rail projects rely on such machinery, the implications are immediate, including a delay in deliveries for machines manufactured in China by a German company. The new rules, effective November 18, give Beijing another lever over India’s industrial ambitions.
Three days earlier, China proposed adding 40 technologies, including advanced solar manufacturing processes, to its prohibited or restricted export lists. These moves follow years of tightening controls on critical minerals and industrial technology. Several consequential measures, notably the 2025 rare earth restrictions, emerged amid China’s confrontation with the United States.
Yet India has felt their effects acutely. Magnet shortages disrupted Indian automakers, while electronics and clean tech manufacturers struggled to secure equipment and expertise. China’s regulatory arsenal, though developed largely for great power competition, has acquired growing significance for India’s industrial future.
China’s export controls could stymie Indian progress into higher-value manufacturing. India’s production-linked incentives (PLIs) are encouraging investment in batteries, solar energy, and advanced manufacturing. Yet moving into more sophisticated production requires specialized machinery, engineering expertise, and technical know-how, much of which still comes from China. Restrictions on those transfers threaten to slow India’s efforts to develop domestic capabilities.
Chinese strategic commentators have long questioned the wisdom of supplying technology and machinery that could help India emerge as an industrial competitor. Beijing has also challenged Indian subsidies for batteries, EVs, and solar manufacturing at the World Trade Organization. China’s growing list of restrictions on technology exports gives Beijing more ways to act on those longstanding concerns.
Yet restricting India carries a price. India is a major and growing market for Chinese manufacturers, many of which face brutal competition at home and trade barriers in the United States and Europe. Bilateral trade reached a record $155.6 billion in 2025, overwhelmingly in China’s favor: China exported $135.9 billion worth of goods to India. Chinese machinery, components, and expertise are integral to India’s industrial expansion. Therefore, the companies selling them have powerful reasons to keep doing business.
That tension is evident in Chinese-language commentary. Some writers warn that sweeping restrictions would send Indian customers to German, Japanese, or Korean suppliers and accelerate India’s efforts to develop domestic alternatives. Others advocate a more selective approach: continue supplying commercially valuable equipment while guarding the technologies and manufacturing know-how that sustain China’s industrial lead. Yet industrial equipment is a long-term commitment. If Indian buyers cannot count on spare parts, upgrades, and technical support, cheaper Chinese machinery becomes a riskier investment.
The timing is particularly uncomfortable for New Delhi. After years of restrictions on Chinese investment since the Galwan clash in 2020, India eased approval procedures in March for selected manufacturing sectors, including capital goods, electronic components, and solar inputs. Its stated aim was to attract investment, gain access to technology, and connect Indian firms with global supply chains. New Delhi is easing access to Chinese investment just as Beijing tightens controls over technology transfers. Even a Chinese-funded factory approved by India may struggle to obtain the production technology it needs from China.
India may continue expanding its manufacturing base using Chinese equipment. But acquiring the engineering capabilities to produce more sophisticated technologies at home will be increasingly difficult if Beijing restricts access to the expertise it needs.
Beijing, of course, has a calculation of its own. Tighter controls could slow India’s emergence as an industrial competitor while preserving its reliance on Chinese suppliers. Yet excessive restrictions may eventually drive Indian manufacturers toward alternative partners, even at greater cost. Beijing could find that protecting its industrial advantage today comes at the expense of its commercial opportunities in India tomorrow.