India’s Trade Deficit With China Widens To USD 99 Bn In FY25

New Delhi, Apr 17 (KNN) India’s trade deficit with China has expanded to USD 99 billion in fiscal year 2025, up from USD 85 billion in the previous year, according to data released by the Ministry of Commerce.

The widening gap between the two Asian economies stems from a dual trend: India’s exports to China declined by 14.5 per cent to USD 14.25 billion in FY25, while imports from China grew by 11.6 per cent to USD 113.5 billion during the same period. Notably, India’s exports to China have now fallen below 2019-20 levels.

March 2025 figures underscore this concerning pattern, with imports from China surging by 25 per cent to USD 9.6 billion compared to USD 7.7 billion in the previous year.

Meanwhile, India’s exports remained minimal at USD 1.55 billion for the month, representing a 3 per cent decline.

The substantial growth in Chinese imports during FY25 has been primarily driven by increasing demand for electronics, electric vehicle batteries, solar cells, and key industrial inputs.

The Global Trade Research Initiative (GTRI) reports that China maintains its position as India’s leading supplier across all eight major industrial product categories.

“The Production Linked Incentive schemes are fuelling import growth due to their reliance on imported components,” explains Ajay Srivastava, Founder, GTRI.

He characterised these figures as ‘a wake-up call for India,’ emphasising the need to address internal manufacturing gaps and invest in deeper industrial capabilities.

“Without that, the deficit will only grow—and so will our dependency,” Srivastava warns.

India’s principal exports to China include petroleum products, minerals, marine products, organic chemicals, and electronic products.

The expanding trade imbalance raises concerns amid the ongoing trade tensions between China and the United States, which could potentially result in China dumping cheaper goods into the Indian market.

Commerce Ministry officials have disclosed that a recent assessment highlighted the risk of goods being diverted to India due to international tariffs.

“Rising US costs may prompt exporters from countries like China, Vietnam and Indonesia to divert goods to India, triggering import surge,” a ministry official stated.

In response to these concerns, the government has established an Inter-ministerial panel for Import Surge Monitoring.

This panel includes representation from the Department of Commerce, Directorate General of Foreign Trade, Department of Customs, and the Department for Promotion of Industry and Internal Trade, tasked with monitoring potential dumping activities by countries including China, Vietnam, and Indonesia.

(KNN Bureau)

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