India’s trade deficit with China has inched alarmingly close to the $100 billion mark, highlighting the country’s deep-rooted reliance on its northern neighbour. As per official data, the trade gap surged by 16.6% year-on-year to reach $99.2 billion in FY25. This sharp increase comes despite subdued global trade, ongoing geopolitical tensions, and India’s efforts to slow down its import growth.
The growing gap defies the widespread belief that India has been actively trying to curb the flow of Chinese goods into its markets. In reality, China — whose economy has shown a steady and powerful rise over the past few decades — has not only weathered restrictions imposed by India but has also managed to increase the pace of its exports to the Indian market. According to China’s own statistics, the country recorded a trade surplus of $103 billion with India in 2024, a significant jump from the $57 billion surplus reported back in 2019. This steep rise is a clear reflection of India’s heavy dependence on Chinese imports for both industrial inputs and consumer goods.
In FY25 alone, India’s imports from China grew by 11.5% year-on-year, reaching an impressive $113.4 billion. In sharp contrast, Indian exports to China contracted by 14.5%, dropping to just $14.2 billion. This widening gap highlights the one-sided nature of the trade relationship, where China continues to dominate Indian markets with its products while Indian exports remain largely stagnant. Apart from a few small spikes in 2020-21 and 2021-22, India’s exports to China have mostly hovered around the $15 billion mark.
India’s largest imports from China consist of essential industrial and manufacturing components such as machinery, electronic parts, plastics, chemicals, and feed materials — items that directly feed into India’s production processes and economic growth. Despite political differences, border tensions, and trade restrictions, India’s need for these critical imports has continued to drive trade volumes with China upwards.
A closer look at the year-wise trade data makes this pattern even clearer. The trade deficit stood at $44 billion in FY21, jumped to $73.3 billion in FY22, climbed further to $83.1 billion in FY23, slightly increased to $85 billion in FY24, and finally hit $99.2 billion in FY25. This relentless and steady rise signals a long-standing structural dependency that India’s economy has developed on Chinese supplies, especially in sectors where domestic alternatives are either unavailable or noncompetitive.
In conclusion, India’s trade gap with China nearing the $100 billion milestone is more than just an economic statistic — it’s a clear sign of the ongoing challenge for New Delhi to reduce its reliance on Chinese imports while strengthening its own manufacturing capabilities. Breaking this cycle will require major structural reforms, stronger trade policies, and long-term strategic planning to diversify sourcing and promote self-reliance.
Disclaimer:
This article is intended purely for educational and informational purposes, based on verified data and credible news sources. The facts presented reflect the current state of trade between India and China, but readers should conduct their own research or consult with financial advisors before making any conclusions or business decisions based on this information.
