New Delhi, September 12, 2026 (Yes Punjab News)
Prime Minister Narendra Modi and Chinese President Xi Jinping are set to discuss bilateral trade and investment issues during their meeting in New Delhi on Saturday evening, with India’s widening trade deficit with China expected to be a key concern.
India’s exports to China increased 36.62 per cent to $19.47 billion in 2025-26, compared with $14.25 billion in the previous financial year. However, imports from China rose 16.03 per cent to $131.63 billion from $113.46 billion.
As a result, India’s trade deficit with China widened to $112.16 billion in 2025-26 from $99.21 billion in 2024-25. Overall merchandise trade between the two countries grew 18.31 per cent to $151.10 billion during the year, with China overtaking the US to become India’s largest trading partner.
The trade deficit has increased steadily in recent years, from $83.2 billion in 2023-24 and $73.3 billion in 2022-23 to $44 billion in 2021-22, highlighting the need for a more balanced and sustainable trading relationship.
However, the imbalance extends beyond consumer goods. A significant share of India’s imports from China comprises industrial inputs, components and capital goods used by Indian manufacturers.
According to a Global Trade Research Initiative (GTRI) report, electronics, machinery, computers and organic chemicals account for around 66 per cent of these imports. China supplies approximately 43 per cent of India’s electronics imports and 40 per cent of machinery and computer imports, making these supplies important to domestic manufacturing and employment.
India also sources more than 40 per cent of six key critical minerals from China, creating vulnerabilities in renewable energy, electric vehicle and defence supply chains. Any restrictions on such exports could therefore trigger disruptions across critical sectors.
The GTRI report has highlighted the exposure of India’s clean energy, electronics and pharmaceutical industries to disruptions involving critical raw materials and components.
While India is likely to seek greater balance in trade, China is expected to push for easier investment rules to enable Chinese companies to expand their presence in India’s growing market.
FOLLOW NOW
