While some hailed the Oct 21 agreement on Ladakh disengagement between India and China as a diplomatic breakthrough, Beijing’s latest trade tactics reveal its true intentions—undermining India’s industrial and strategic ambitions.
China has imposed restrictive export bans on essential minerals and machinery crucial for India’s growth in key sectors like renewable energy and infrastructure. By targeting gallium and germanium—indispensable for solar power and semiconductors—Beijing is striking at the heart of India’s renewable energy targets. Furthermore, by blocking the sale of tunnel-boring machines (TBMs), critical for metro and other infrastructure projects, China has escalated its economic warfare.
In August 2023, China tightened its control over the export of gallium and germanium to nations like India, the US, and Japan. These minerals are crucial for India’s rapidly expanding solar energy industry, particularly in manufacturing solar cells and modules.
India, a growing player in renewable energy, is now scrambling to maintain its progress. China, as the world’s largest supplier, has effectively sabotaged India’s solar power ambitions, forcing Indian firms to reroute supplies via Dubai’s Jebel Ali port. This workaround has proven costly, inflating project expenses by as much as 10% and tripling delivery times from 15 days to three months.
Moreover, rerouting involves higher logistics, warehousing, and financing costs, which strain already tight budgets for strategic infrastructure projects. Experts warn that this temporary fix is unsustainable, leaving India vulnerable to China’s economic blackmail.
China’s economic aggression doesn’t end with minerals. India’s infrastructure projects have hit a roadblock as Beijing obstructs the sale of German-made TBMs to Indian buyers. Herrenknecht, a German company that supplies TBMs, has faced disruptions because China, a critical production base for the company, is blocking their export to India.
India’s Commerce and Industry Minister, Piyush Goyal, recently highlighted the issue during a Delhi Metro ride with German Vice Chancellor Robert Habeck. In a widely shared video, Goyal suggested halting the purchase of Herrenknecht machines unless Germany resolves the issue.
India has already taken steps to counter China’s economic coercion. Recent reports suggest India has stopped importing manufactured goods from Nepal and possibly other nations that include Chinese components. However, these measures are only the beginning.
Experts argue that India must aggressively focus on building its domestic manufacturing capabilities for critical components like gallium, germanium, and TBMs. Without self-reliance, India’s strategic projects will remain at the mercy of Beijing’s geopolitical whims.
China’s export bans are not merely trade policies—they are calculated moves to stifle India’s growth and keep it from realizing its full potential on the global stage. The message is clear: Beijing views India’s rise as a threat and will use every tool at its disposal to sabotage it.
