India is exporting more to China than ever before, but the surge in shipments is doing little to narrow the trade gap between the two Asian economies. The country's trade deficit with China crossed $100 billion in the first nine months of 2026, highlighting the persistent imbalance in a relationship where imports continue to dwarf exports.
Data released by China's General Administration of Customs on Wednesday showed that India's trade deficit with China widened 20.7% year-on-year to $105.93 billion between January and September. Bilateral trade rose 25.4% during the period to $144.45 billion, with Chinese exports accounting for the overwhelming majority of the total.
China's exports to India increased 23.3% to $125.19 billion, while India's exports to its northern neighbour jumped 40.7% to $19.26 billion. Although the growth in Indian exports is encouraging, the much smaller base means it has yet to make a meaningful dent in the overall trade imbalance.
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The disparity reflects the different roles the two countries play in the bilateral trading relationship. China supplies large volumes of electronics, machinery and chemicals that feed into India's manufacturing sector. Indian businesses rely on these imports for production, infrastructure and consumer demand.
India, meanwhile, exports a mix of primary commodities and resource-based products, including ores, fuels, seafood and agricultural goods.
Seafood products, naphtha and printed circuit boards have emerged among India's major exports to China this year, according to the reported trade data. However, the continued dependence on Chinese supplies, including finished electronics and machinery, remains a concern for New Delhi.
Indian officials have repeatedly sought greater access to China's markets for information technology, pharmaceutical and agricultural products, sectors in which Indian businesses have significant capabilities. Progress on improving market access, however, has remained limited.
The widening gap follows a record trade deficit in the previous financial year. According to India's Commerce Ministry, bilateral trade reached $151.1 billion in 2025-26, with exports to China rising 36.66% to $19.47 billion and imports increasing 16% to $131.63 billion.
The resulting trade deficit stood at $112.6 billion in 2025-26, compared with $99.2 billion in 2024-25.
The latest figures put the deficit on course to surpass the previous year's level, although China's trade data follows the January-December calendar year, while India reports its trade figures on an April-March financial-year basis.
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The issue has also featured in diplomatic discussions between India and China. During Prime Minister Narendra Modi's meeting with Chinese President Xi Jinping on the sidelines of the BRICS summit in New Delhi last month, both leaders acknowledged concerns surrounding the trade imbalance and supply chains.
According to a statement from India's Ministry of External Affairs, the leaders “underlined the need to address each other's concerns, including structural trade imbalance and supply chain issues, and facilitation of meaningful and predictable market access”.
China's Foreign Ministry said the two sides should “address each other's economic and trade concerns in a balanced way and promote the sound and steady development of economic and trade relations”.
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