Trade Data Hints At India Emerging As Key Pivot In US–China Rift 

India and China’s latest trade figures highlight how the US–China trade war is reshaping global flows. Released by China Customs on June 10 and India’s Commerce Ministry today, the May 2025 data shows a sharp drop in China’s exports to the United States and a redirection of trade to markets such as India, the EU, and ASEAN. 

India’s import surge in electronics and machinery, much of it from China, and rising exports to the United States suggest that global supply chains are adapting rapidly. The numbers also signal rising risks for India amid Middle East tensions and a more protectionist global trade environment.

While China’s overall exports grew modestly by 4.6%, from $302.1 billion in May 2024 to $316.2 billion in May 2025, its exports to the United States fell by 34.5%, from $44.0 billion to $28.8 billion over the same period.

This sharp decline in China’s shipments to the United States is being partially offset by increased exports to other markets, including the EU, up 12% at $49.5 billion, ASEAN, up 15% to $58.4 billion, and India, up 12.4% to $11.13 billion. Countries should monitor any potential export push through dumping.

India’s own trade data supports these trends. Although overall merchandise imports dipped slightly by 1.8% year-on-year, from $61.7 billion in May 2024 to $60.6 billion in May 2025, this decline was driven mainly by lower oil and gold imports.

Excluding petroleum, gold, and diamonds, India’s imports actually rose by 12%, from $36.8 billion to $41.2 billion. This is reflected in GST collections on imports. India’s net customs revenue from IGST rose by 72.9%, increasing from ₹245.1 billion in May 2024 to ₹423.7 billion in May 2025. Since petroleum products are outside the GST system, this sharp rise in IGST collections broadly reflects the overall increase in imports.

Two categories with high import growth stood out: electronics, up 27.5% at $9.1 billion, and machinery and computers, up 22% at $5 billion. Part of this increase came from China, as India’s combined imports from China and Hong Kong surged by 22.4%, from $9.8 billion to $12 billion.

Meanwhile, India’s exports to the United States jumped 17.3% to $8.8 billion, driven in part by higher smartphone shipments.

The May 2025 trade data underlines intensifying tensions between the United States and China, with exports between the two falling sharply. This may change if both countries reach a deal to reduce tariffs.

For India, the global outlook remains complex. Rising conflicts in the Middle East, particularly involving Iran, Israel, the Houthis, and Hamas, pose risks to critical shipping routes and oil supplies. As global trade becomes more protectionist, India must tread carefully. It should pursue only balanced trade agreements and reinforce efforts to improve the ease of doing business at home.