Even as Indian exports to China grew 25% during the April–October period, India’s trade deficit with China continued to widen, touching $64 billion in the first seven months of the current financial year, compared with $57.65 billion in the same period last year. In 2024–25, India’s trade deficit stood at $99.12 billion, coming close to breaching the $100-billion mark.
While the government has attributed the recent surge in exports to China to diversification of export markets in response to the impact of US tariffs, India’s overall exports to China have been on a declining trend for the past five years. India’s exports to China fell nearly 33% between 2020–21 and 2024–25, even as imports from China rose by almost 74% over the same period.
India’s exports to China have declined every year, touching an all-time low of $14.25 billion in the last financial year. In the first seven months (April–October) of the current financial year, exports have reached $10.03 billion. The surge in Chinese imports in 2024–25 was driven by rising demand for electronics, EV batteries, solar cells, and key industrial inputs. According to the Global Trade Research Initiative, China is India’s top supplier across all eight major industrial product categories.
Even as electronics remain one of India’s major export categories, the sector depends heavily on China for raw materials. Trade experts have consistently flagged that India’s internal manufacturing gaps and lack of deep industrial capabilities will continue to fuel dependence on Chinese imports. Manufacturing sectors like steel have repeatedly raised concerns over dumping by China and the impact of predatory pricing, which has burdened domestic producers.
“Several Indian businesses continue to import from China because raw materials are available at far more affordable prices. Reducing imports is not that easy,” said a government official who did not wish to be named.
Even during periods when exports to China rise, the trade deficit tends to expand as well. While exports grew by a little more than 4% between April and August this year, the deficit increased by over 15% during the same period.
To address this, the government has formed an Inter-Ministerial Panel for Import Surge Monitoring, with representation from the Department of Commerce, DGFT, Customs, and DPIIT, to keep a close watch on potential dumping by China.
However, the recent relaxation of quality control orders on items such as stainless steel, textiles, and petrochemicals has triggered fresh concerns among manufacturers about the possibility of a renewed import surge.
Source Name : New Indian Express