India’s trade deficit with China has widened to an all-time high of $99.2 billion in the financial year 2024–25, underlining growing concerns over the country’s increasing reliance on Chinese imports.
The record gap is being driven largely by a surge in electronics goods, consumer durables, electric batteries and solar cell imports.
According to official trade data released by the commerce ministry, India’s total imports from China rose to $113.5 billion during the 12 months ending March 2025.
In the same period, India’s exports to China dropped significantly to $14.3 billion, registering a 14.5% decline in March alone. The sharp increase in imports and dip in outbound trade has raised alarms among policymakers and industry experts alike.
The trade imbalance has coincided with rising global concerns over trade dynamics, particularly as the United States under President Donald Trump recently announced steep tariff hikes on Chinese goods.
This move, while offering a temporary 90-day pause for India and other major trading partners, is feared to cause a redirection of Chinese goods into markets like India, thereby intensifying the pressure on Indian industry.
In March, India saw a year-on-year spike of over 25% in imports from China, amounting to $9.7 billion for the month. Much of this increase was led by demand in electronics, electric batteries and solar technology.
Industry experts have pointed out that India’s own rising exports in sectors like pharmaceuticals, engineering goods and electronics are ironically fuelling more imports from China, due to their dependence on Chinese components.
Ajay Srivastava, founder of the Delhi-based think tank Global Trade Initiative, stated that the latest data serves as a wake-up call. He highlighted that the deeper structural dependency on Chinese imports points to vulnerabilities in India’s manufacturing base.
He also noted that India’s exports to China are now even lower than what they were in 2013–14, despite the Indian rupee being relatively stronger back then.
China has now become India’s second-largest trading partner, with total bilateral trade reaching $127.7 billion in FY 2024–25, just behind the United States.
Analysts warn that the trade deficit could widen further in the current financial year, potentially by 20%, as Chinese exporters seek alternative destinations amid escalating tariffs in the U.S.
In response, the Indian government has said it will set up a dedicated monitoring unit to track the rising trend of low-cost imports, particularly from countries like China. Authorities have also issued warnings to domestic firms, urging them not to support foreign exporters in circumventing U.S. trade barriers.
Follow us
