India’s trade deficit with China reached $99.2 billion in 2024-25, marking its highest-ever annual gap with any trading partner. This is not far from India’s total trade deficit of $109 billion in 2009-10.

Imports from China rose to $113.46 billion, while exports stood at only $14.25 billion

This imbalance reflects India’s continued dependence on Chinese goods—particularly electronics, machinery, and intermediate products—despite policy efforts to boost domestic manufacturing and reduce external reliance, said Ajay Srivastava, founder of Global Trade Research Initiative. 

Imports from China surged due to rising demand for electronics, EV batteries, solar cells, and key industrial inputs—sectors where Beijing dominates India’s supply chain, said Ajay Srivastava, founder of Global Trade Research Initiative. 

China is India’s top supplier in all eight major industrial product categories and the production-linked incentive scheme, introduced by the government a couple of years back, are fuelling import growth due to their heavy reliance on components from abroad, he said.

“This signals more than a trade issue; it’s a competitiveness crisis. These numbers are a wake-up call: India needs to fix its internal manufacturing gaps and invest in deep industrial capabilities. Without that, the deficit will only grow—and so will our dependency,” said Srivastava.

India recorded a $41.2 billion trade surplus with the US, which remained its top export destination. Total bilateral trade with the US stood at $131.8 billion, with exports of $86.5 billion and imports of $45.3 billion.

India’s overall trade performance in 2024–25 showed mixed signals. Merchandise exports were broadly flat, rising just 0.1% to $437.4 billion, after contracting 3.1% in the preceding fiscal. Imports, however, increased by 6.2%, reaching $720.24 billion during the year. As a result, the trade deficit widened by 17.3%, reaching $282.82 billion—the highest ever for a fiscal year. While India’s export growth to markets like the US remained strong, the broader picture was shaped by rising import costs and persistent dependency on external suppliers across multiple sectors.