India-China Trade: A Mixed Bag of Growth and Challenges
Recent annual trade data shows that India’s exports to China jumped by $5.5 billion last year, amounting to $19.75 billion in total. This is a positive shift, especially since the trade deficit reached an all-time high of $116.12 billion. Despite this gap, bilateral trade hit a record $155.62 billion in 2025.
In contrast, Chinese exports to India rose to $135.87 billion, reflecting a 12.8% increase. This growth comes amid a complex backdrop of trade tensions and tariff hikes, particularly during former U.S. President Donald Trump’s administration.
Experts believe the increase in Indian exports, though modest, signals a turning point. Key products like oil meals, marine goods, and spices are starting to find a foothold in China’s challenging market. This is particularly important as China seeks to boost its domestic consumption.
Despite facing pressure, China’s overall trade continues to thrive. In 2025, its trade surplus soared to nearly $1.2 trillion, a 20% increase from the previous year. Exports reached $3.77 trillion, while imports totaled $2.58 trillion. Wang Jun, a vice-minister at China’s General Administration of Customs, attributes this resilience to a diversified trading strategy and robust industrial capabilities.
Gary Ng, an economist from Natixis, notes that while Chinese exports may grow in 2026, they might do so at a slower rate. Current global economic conditions, particularly with central banks having limited capacity for further interest rate cuts, suggest that external demand may not be as strong.
For India, access to sectors like IT, pharmaceuticals, and agriculture remains a priority. These areas align well with India’s strengths and could help balance the trade dynamics in the future.
As the trade landscape evolves, both nations are navigating new challenges while seeking opportunities for collaboration. It’s a complex relationship that continues to develop, reflecting broader global economic trends.
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INDIA CHINA EXPORTS, INDIA EXPORTS TO CHINA, INDIAN EXPORTS TO CHINA RISE IN 2025 BUT TRADE DEFICIT TOUCHES RECORD HIGH OF USD 116 BN
