While the US continues to be India’s top export destination, China continues to be the top source of India’s imports.VAs per provisional data released by the commerce ministry on India’s foreign trade, China remained India’s top import source in 2024-25 with imports worth $113.46 billion. This marked an 11.5% increase over $101.74 billion worth of imports from China in FY24.
Meanwhile, India’s exports to China fell by 14.5% in FY25 to $ 14.25 billion from $ 16.67 billion in FY24. This took India’s trade deficit with China to a record $99.2 billion last fiscal.
The data is significant on two counts. First, India is hopeful of a competitive advantage vis-à-vis China when it comes to exports to the US following the levy of reciprocal tariffs. The US has already levied retaliatory tariffs of 245% on China as the trade war between the two countries intensifies even as US President Donald Trump has put reciprocal tariffs on other countries on a 90-day pause.
Second, India is already concerned about possible dumping of goods from like China, Vietnam and Indonesia due to the reciprocal trade tensions and rising US costs. An inter-ministerial committee for import surge monitoring has been set up with representation from the commerce ministry, Directorate General of Foreign Trade, Central Board of Indirect Taxes and Customs and the Department for Promotion of Industry and Internal Trade.
Experts note that the staggering trade deficit with China is a cause for concern. “The record gap reflects deeper structural dependencies, not just trade imbalances. Imports surged by 11.5% driven by rising demand for electronics, EV batteries, solar cells, and key industrial inputs—sectors where China dominates India’s supply chains,” said Ajay Srivastava, founder, Global Trade Research Initiative.
China is India’s top supplier in all eight major industrial product categories. The PLI schemes are fueling import growth due to their heavy reliance on imported components, he further noted, adding that India needs to fix its internal manufacturing gaps and invest in deep industrial capabilities.
In March 2025, India’s imports from China jumped up by 25% to 9.67 billion while exports declined by 2.99% to $ 1.51 billion.
Meanwhile, India’s exports to the US in FY25 were $86.51 billion as against $77.52 billion in FY24. Ahead of the levy of reciprocal tariffs from April 9, exports from India to the US in March 2025 surged by 35% to $ 10.14 billion as against $7.5 billion in FY24.
India’s overall merchandise exports during FY25 were almost flat, registering a growth of 0.08% to $ 437.42 billion compared to $437.07 billion in FY24. Merchandise imports during FY25 were $ 720.24 billion as compared to $678.21 billion during FY24.
