(TibetanReview.net, Nov16’24) –While the Oct 21 deal on eastern Ladakh disengagement and patrolling with China was hailed by some in India as a “breakthrough”, the two countries still have a lot of ground to cover before normalizing their overall bilateral ties, as is evident in their ongoing trade frictions.
In its latest attempt to curb India’s industrial growth, China has imposed export restrictions on essential minerals and machinery, ranging from gallium and germanium, critical for solar power and semiconductors, to tunnel-boring machines (TBMs) used in infrastructure projects like metro construction, reported swarajyamag.com Nov 15.
In Aug 2023, China imposed tight controls on the export of gallium and germanium to countries including India, the US, and Japan. These minerals are vital for India’s rapidly growing renewable energy sector, especially in the production of solar cells and modules.
China, the world’s largest supplier, has now cut off access to these crucial resources, jeopardizing India’s ability to meet its solar power production targets, the report said.
India currently circumvents China’s ban by rerouting the shipment of these supplies through Dubai’s Jebel Ali port. Dubai-based traders or companies lease or import machinery from China, then re-export them to India, the report said.
However, the rerouting process has inflated project costs by as much as 10%. Besides, what was once a 15-day shipping cycle is now stretching to three months, causing significant delays. Furthermore, additional costs arise due to logistics, warehousing, and financing, all of which strain the already tight budgets for strategic infrastructure projects in India, the report noted.
Apart from other costs as well arising from the payment system and so forth, spare parts, often sourced through third-party intermediaries, add to the financial burden.
Besides, experts caution that the current workaround is unsustainable in the long term. Relying on Dubai as a middleman is a temporary fix to China’s economic bullying, the report said.
Experts argue that India must focus on building domestic manufacturing capabilities for these vital components. Only then can India fully decouple its reliance on foreign suppliers, especially when China’s restrictions may continue to disrupt supply chains in the future, the report said.
During a Delhi Metro ride late last month, India’s Commerce and Industry Minister Piyush Goyal informed visiting German Vice Chancellor Robert Habeck that New Delhi may halt the purchase of German-made tunnel boring machines if issues such as China blocking sales continued. This conversation, shared in a video that went viral on social media platform X, underscoring India’s concerns over critical infrastructure supplies.
Goyal explained that India currently buys tunnel boring machines from Herrenknecht, a German company. However, recent complications had arisen as China, a key production base for Herrenknecht, had obstructed the sale of these machines to India, noted newsx.com Oct 28.
India, on its part, was recently reported to have stopped importing manufactures from Nepal, and possibly other countries, if they included Chinese components.