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India-China Trade Deficit Widens to $106B Despite Export Spikes: GTRI Report

India's trade gap with China is getting bigger, even though our exports have seen some sharp jumps recently. The problem is that these export increases are based on just a few products and aren't stable or broad-based. Meanwhile, we're importing more and more from China, especially electronics and machinery. Experts warn that without building up our own manufacturing, these short-term spikes won't fix the deep trade imbalance.

Key Points: India's Trade Deficit with China Widens Despite Export Growth

  • India's exports to China surged 90% in November, driven by a narrow set of products like naphtha
  • The trade deficit is estimated to reach a record $106 billion for 2025 based on Indian data
  • Nearly 80% of India's imports from China are concentrated in electronics and machinery
  • The report highlights data discrepancies that may indicate under-invoicing of imports
2 min read

India's trade deficit with China set to widen despite recent export spikes: GTRI

GTRI report reveals India's trade deficit with China hit a record $106B in 2025, despite volatile export spikes in naphtha and electronics.

"Short-term export spikes will do little to correct the structurally imbalanced nature of India-China trade. - Global Trade Research Initiative (GTRI)"

New Delhi, December 19

India's trade deficit with China is expected to widen further, even as exports to the neighbouring country have shown sharp but volatile spikes this year, according to a study by the Global Trade Research Initiative (GTRI).

The report notes that India's exports to China surged nearly 90 per cent year-on-year in November 2025 to USD 2.2 billion, largely driven by a narrow set of products rather than broad-based growth. For April-November 2025, exports rose 33 per cent to USD 12.2 billion. However, the gains were concentrated mainly in naphtha and a few atypical electronics items, underscoring the fragility of India's export performance.

Naphtha emerged as the single largest contributor, with exports jumping more than five-fold in October and rising 172 per cent during April-October to USD 1.4 billion, reflecting strong Chinese demand for petrochemical feed-stocks. The study also highlighted extraordinary spikes in electronics exports, including printed circuit boards and mobile phone components, even as India remains a large net importer of these items from China.

In contrast, traditional exports such as iron ore and shrimp remained volatile or weak. Iron ore exports fell 30 per cent during April-October, while shrimp exports recorded only modest growth. GTRI said the top three Indian exports to China, naphtha, iron ore and shrimp, show sharp year-to-year swings, driven more by Chinese demand cycles than by any stable or diversified export strategy.

GTRI said that despite the recent export rebound, India's imports from China have continued to rise sharply. Imports are estimated to reach USD 123.5 billion in 2025, pushing the bilateral trade deficit to a record USD 106 billion on Indian data. Chinese customs data suggest an even wider gap, with the 2025 deficit estimated at over USD 115 billion.

Nearly 80 per cent of India's imports from China are concentrated in electronics, machinery, organic chemicals and plastics. Electronics imports alone touched USD 38 billion in the first ten months of 2025, reinforcing India's supply-chain dependence on China, the report said.

The study, however, also pointed to persistent discrepancies between Indian and Chinese trade data, noting that India reports lower imports from China than China reports as exports, an unusual pattern that may indicate under-invoicing and warrants closer scrutiny by customs authorities.

GTRI noted that without a sustained push to expand competitive manufacturing, reduce import dependence in critical sectors and strengthen trade monitoring, short-term export spikes will do little to correct the structurally imbalanced nature of India-China trade.

- ANI

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Reader Comments

P
Priya S
The part about under-invoicing is very concerning. If our own customs data is unreliable, how can we formulate good policy? This needs immediate investigation. Our trade strategy can't be built on shaky numbers.
R
Rohit P
Exporting raw materials like naphtha and iron ore while importing finished electronics... this is a classic colonial-era trade pattern. We're just a supplier of commodities. Time for a real 'Make in India' revolution, not just slogans.
S
Sarah B
As someone working in the tech sector, the $38 billion electronics import figure is staggering. We have the talent and the market. We need to create an ecosystem that rivals Shenzhen, focusing on components, not just assembly.
A
Aditya G
The volatility is the real issue. One month we're up 90%, the next we could crash. Our exports are at the mercy of Chinese demand cycles. We need to diversify both our export basket and our markets. Look at Africa, Latin America more aggressively.
M
Meera T
It's easy to blame China, but we need to look inward. Can our products compete on quality and price globally? We need better infrastructure, less red tape, and more support for MSMEs to become export champions. The solution starts at home.
K
Karthik V
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