India’s Exports to China Surge 40%, Yet Trade Deficit Crosses $100 Billion
India’s exports to China are growing rapidly, but the country’s trade deficit with its neighbouring economic giant has continued to widen, crossing $100 billion in the first nine months of 2026. The latest figures highlight a persistent imbalance: India is selling more goods to China than a year ago, but it is still importing far more than it exports.
According to data released by China’s General Administration of Customs, India’s trade deficit with China reached $105.93 billion between January and September 2026, up 20.7% from the same period last year.
Key Numbers: India–China Trade in 2026
• Trade deficit: $105.93 billion in January–September 2026
• Indian exports to China: $19.26 billion, up 40.7%
• Chinese exports to India: $125.19 billion, up 23.3%
• Total bilateral trade: $144.45 billion, up 25.4%
The figures show that stronger Indian exports have not been sufficient to close the gap between the two countries’ trade flows.
Why Is the Trade Deficit Still Growing?
The central reason is the difference in the value of goods India buys from China and the value of goods it sells there.
Indian businesses rely on Chinese supplies of electronics, machinery, chemicals and components used in manufacturing. These imports support production across several industries, including sectors that make finished goods for the Indian market and for export.
As industrial activity and demand for equipment increase, imports can rise even when Indian exports are performing well. The result is a larger trade deficit if import growth in value terms outpaces export growth.
India’s Exports Are Growing—but From a Smaller Base
The 40.7% rise in Indian exports to China is significant. However, exports reached $19.26 billion during the first nine months of 2026, compared with Chinese exports to India of $125.19 billion.
India’s shipments to China include products such as ores, fuels, seafood and agricultural goods. The composition of trade matters: India’s exports and China’s exports serve different roles in their respective economies, and the two sides do not exchange goods in equal amounts or at comparable values.
Even a strong percentage increase in Indian exports may therefore have a limited effect on the overall deficit when the starting export value is much smaller.
A Longer-Term Challenge for Indian Industry
The latest figures follow a record trade deficit in India’s 2025–26 financial year. According to figures cited by PTI, India’s exports to China rose 36.66% to $19.47 billion, while imports increased 16% to $131.63 billion. The resulting deficit reached $112.6 billion, compared with $99.2 billion in 2024–25.
The difference between the calendar-year figures published by Chinese customs and India’s April–March financial-year data is important when comparing totals. The reporting periods are not identical.
Reducing the imbalance would require more than a temporary increase in exports. It would involve expanding the range and competitiveness of Indian products that can enter the Chinese market, strengthening domestic manufacturing where feasible, and improving access for sectors in which Indian businesses see export opportunities.
Market Access Remains a Key Issue
India has repeatedly sought better access to China for products and services in areas including information technology, pharmaceuticals and agricultural goods. However, export opportunities depend on market rules, regulatory approvals, commercial demand and the ability of Indian producers to compete on price and quality.
The two countries have also discussed structural trade imbalances and supply-chain issues as part of broader efforts to manage their economic relationship. Progress in these areas could influence future trade flows, but the latest figures alone do not establish whether the deficit will narrow.
What the Numbers Mean
India’s rising exports to China indicate stronger sales in the period covered by the data. At the same time, the $105.93 billion deficit shows that the overall relationship remains heavily tilted towards imports from China.
The key question is not simply whether India can sell more to China, but whether export growth can become broad and sustained enough to narrow the gap while Indian manufacturers continue to depend on imported inputs.
For now, the latest data point to a clear contrast: Indian exports are growing quickly, but the value of imports from China remains more than six times as large.