India’s trade relationship with China showed mixed signals in 2025. While Indian exports to China recorded a notable rise after years of stagnation, the overall trade deficit widened sharply. Fresh data released by Chinese customs shows that bilateral trade touched a record high, but India’s import dependence on China continues to remain a major economic challenge.
Why in News?
India’s exports to China increased in 2025, but the trade deficit widened to a record $116.12 billion, according to official Chinese customs data released in January 2026.
India’s Export Performance to China
- Indian exports to China rose to $19.75 billion between January and December 2025.
- This marked a 9.7% increase, translating to a rise of $5.5 billion compared to the previous year.
- The growth is significant as Indian exports to China had struggled for years due to market access barriers and weak demand.
- Analysts see this increase as an early sign of diversification in India’s export basket and gradual entry into difficult Chinese markets.
Record Trade Deficit Despite Export Growth
- Despite the export improvement, India’s trade deficit with China touched an all-time high of $116.12 billion in 2025.
- Chinese exports to India rose 12.8% to $135.87 billion, far outpacing India’s export growth.
- The deficit crossed the $100 billion mark for the second time since 2023, highlighting India’s heavy reliance on Chinese imports such as electronics, machinery, chemicals and intermediate goods.
- This imbalance remains a key concern for policymakers.
Bilateral Trade Hits All-Time High
- Total bilateral trade between India and China surged to a record $155.62 billion in 2025.
- The growth came despite global trade disruptions and tariff hikes imposed by Donald Trump. Both countries faced external trade pressures, yet trade volumes expanded due to supply chain adjustments and strong manufacturing output in China.
- The figures underline the economic interdependence between the two Asian giants, even amid political and strategic tensions.
Sectors Driving India’s Export Growth
- Observers noted that the rise in Indian exports was driven by oil meals, marine products, telecom instruments and spices.
- These sectors managed to gain limited but meaningful access to the Chinese market, which is facing challenges in boosting domestic consumption.
- India has long demanded better access for its IT services, pharmaceuticals and agricultural products, areas where it enjoys global competitiveness.
- However, progress in these sectors remains limited.
China’s Global Trade Context
- China’s overall global trade continued to expand in 2025. Customs data showed China’s trade surplus rose to nearly $1.2 trillion, with exports at $3.77 trillion and imports at $2.58 trillion
- . Chinese officials attributed export resilience to diversified trading partners and strong industrial capacity.
- Economists, however, expect export growth to slow slightly in 2026 due to weakening global demand and limited monetary policy space worldwide.
Key Summary at a Glance
| Aspect | Details |
| Why in News? | India-China trade data for 2025 |
| India’s Exports to China | $19.75 billion |
| Export Growth | $5.5 billion increase |
| Trade Deficit | $116.12 billion |
| Total Bilateral Trade | $155.62 billion |
| Key Export Sectors | Marine products, spices, oil meals |
Question
Q. India’s trade deficit with China in 2025 stood at approximately:
A. $75 billion
B. $99 billion
C. $116 billion
D. $135 billion
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