In the Shaftview, this post with the unusual title stood out: ' “We should stop buying German equipment”: Piyush Goyal confronts German Vice Chancellor over China blocking sale of German tunnel boring machines to India'. It was posted in the `India Tunnelling` group. Thanks to our Indian colleagues running an open group, I was able to read it.

We understand that those TBMs are produced or assembled in China. Herrenknecht, like many big companies in the world, also has production facilities in China. And someone no less than Minister of Commerce and Industry of India complains to someone no less than Minister for Economic Affairs of Germany that, China makes it difficult to export those Herrenknechts to India.

But can this really be the case?

Probably not. At least, I do not think so. I believe, this is as unlikely as China preventing Apple iPhones built by Foxconn in China from being exported to the US.

As a normal profit-oriented company, Herrenknecht is not likely to allow such an interference. Given the rise of the Chinese TBM manufacturers and the much-talked-about preference of the Chinese government for Chinese brands, it would not be wrong to assume that most of the output of the Herrenknecht factory in China is destined for countries other than China anyway. If Chinese government also tried to curb Herrenknecht exports to India, which is relatively a big TBM market, Herrenknecht management would not really allow that.

So, what is going on? Or rather, what may be going on?

India is already a relatively big market for TBM manufacturers which will is expected to get only bigger in time. But India lacks a TBM manufacturing base. I do not know a single Indian TBM producer. I know that lately some companies in India started producing Y-parts like cutters but what I am hearing is that, quality-wise, they are not there yet. India is totally reliant on foreign TBM manufacturers. Trouble is; after all that consolidation in recent years, there aren't really so many brands around to be picky. This is especially true with India's case.

In our times, most of the TBMs with a good price/performance ratio are produced in China. A country with which India has serious problems, to mention the deadly border disputes as one. This effects also the trade between two countries. Just remember the CRCHI-case with Mumbai Coastal Road tunnel project. Even the assembly of the delivered CRCHI TBM had been a problem because of the poor bilateral relations on state level. As an alternative, when we look at the Japanese manufacturers, India faces the same problem with the rest of the world. The Japanese TBMs are the best but they are also the most expensive. Then you have the Australian/Japanese Terratec but it is also being built in China. The diminishing US manufacturers have a limited range of products nowadays. Then you are left with only one brand with a very wide spectrum of TBM models at reasonable performance and reasonable price. Herrenknecht of Germany. But then, it is produced in China too (at least the ones India needs, it seems).

We all know that India does not want to import Chinese-made TBMs. It started with Chinese brands. But now it may have expanded to cover anything made in China, including the TBMs of the German company. Or, in my opinion, more likely, the Indian authorities may have been trying to give the impression of such `sensitivity` to pressure Herrenknecht to start producing their machines in India, instead of sending them over from China.

If this indeed is the case; it will be a very tricky situation for Herrenknecht. Probably moving the Chinese factory to India or even opening an additional factory in India will be very risky.

For several reasons. Despite the antics of far-right Narendra Modi regime, India is still sort of a democracy. At least, it holds free elections. This means; politicians will need to take into account the people-factor in taking decisions. Moreover, India not being a developed democracy like Germany or a total authoritarian country like China, Indian politicians tend to be very populist. It means, slower decision making, not always the right reasons for the decisions, and changing those decisions often. Just remember what the Tata had to go through to build and keep ts Nano car factory in India. And remember that; Tata is not only a native Indian company, but also the  biggest Indian conglomerate. Just imagine what a German company would have to go through in such a political environment. On top of all this, as secondary issues, India does not have the manufacturing workforce and the ecosystem of suppliers that China has.

What do you think?