Supply-chain diversification without domestic capability is incomplete. Discuss with reference to heavy construction equipment.

Supply-chain diversification means sourcing from many suppliers so that no single country can choke supply. In October 2026, China brought tunnel-boring machines (TBMs) under export licensing. This showed that changing vendors without building capability at home only moves the risk elsewhere.

Why diversification alone is incomplete

• The brand is not the origin: Western-branded TBMs and their key parts, such as cutterheads and main drives, are often made in Chinese plants. Buying from a "German" firm can still mean shipping from China.
• Concentrated base: China dominates global TBM production, so many alternative vendors depend on the same component ecosystem.
• Growing import reliance: Capital-goods imports, which include construction machinery, grew 9.2% in Q2 FY26. This reflects reliance on advanced machinery sourced from abroad [1].
• Dual-use leverage: TBMs and high-altitude shotcrete machines are used in Himalayan border tunnels. Licensed exports let a rival delay strategic projects, not only metro lines.
• Assembly is not capability: Local assembly-and-refurbishment units cannot replace a machine held up abroad. India's real gap is in design and repair.

Why diversification still matters

• Having several vendors buys time and bargaining power while domestic capacity matures.
• Each TBM is customised to the site geology and needs a minimum order book. A purely national plant would be costly and slow to build, so foreign partners remain essential.

Building domestic capability

• CIE Scheme: The 2026-27 Budget proposes a Scheme for Enhancement of Construction and Infrastructure Equipment. It covers tunnel-boring machinery for metros and high-altitude roads [1].
• Design capacity: CPSE-run Hi-Tech Tool Rooms at two locations will offer localised design, testing and manufacture of precision components [1].
• Thin base so far: Phase-II of the capital-goods competitiveness scheme approved 32 projects worth ₹1,363.87 crore [2]. That support was spread across the whole sector rather than aimed at any one critical product.
• Pooled demand: Metro, rail, highway and hydro agencies can combine their TBM orders so that a plant gets enough volume to be viable.
• Localise critical parts: Tenders can give credit for cutterheads and drives made in India, and joint ventures can require technology transfer.

Vendor diversification → Component localisation → Design & repair capability → Resilience
        (short term)            (medium term)              (long term)

Fig.: Stages of supply resilience

Diversification and domestic capability are complements, not substitutes. A "build-with-partners" approach is the way forward: anchor foreign OEMs in India and move cutterhead, drive and design capability onshore step by step. This would make India's infrastructure push resilient in line with Atmanirbhar Bharat and SDG 9 (resilient infrastructure and industrialisation).