From Deficit to Drive: India-China Trade Sees Record 37% Export Spike in 2025
India’s trade relationship with China has long been viewed through the lens of imbalance. China is India’s second-largest trading partner after the US; however, it accounts for just 35% of India’s overall trade deficit. In FY25, imports from China increased to $113.5 billion, marking an 88% increase over the past decade. In contrast, India’s exports to China grew to $14.3 billion in FY25, reflecting growth of only 19% over the same period.
However, newly released figures from the Department of Commerce for April to December 2025 signal a notable shift in momentum, particularly on the export front.
Exports to China surged from $10.4 billion to $14.2 billion during April-December 2025, marking an unprecedented 37% year-on-year growth, the strongest in recent years and far outpacing India’s overall export growth of a modest 2.3% during the same period.
The magnitude of this jump has drawn attention from trade analysts, who see it as an early sign of diversification and strategic recalibration at a time when global demand remains uneven and geopolitical tensions continue to reshape trade flows.
Between April and December 2025, the exports to China have been broad-based but concentrated in certain high-impact categories; parts of telecommunication equipment and petroleum light oils together accounted for roughly 26% of India’s exports to China (Table 1). The expansion in telecom components points to India’s growing integration into global electronics value chains, while the rise in petroleum light oils reflects strong commodity demand dynamics.
One of the most striking developments was the surge in exports of flat panel display modules of organic light-emitting diodes, which had recorded negligible shipments in the corresponding period last year (Table 1). The sharp increase suggests India’s emerging presence in more technology-intensive segments. Frozen shrimp and aluminium also registered strong gains, reinforcing the trend of diversified product expansion.
The timing of this surge is particularly significant. In August 2025, the US imposed an additional 25% tariff on Indian imports. This was followed by another 25% penalty linked to India’s purchases of Russian oil, effectively raising tariffs on many Indian goods to 50%. The move introduced fresh uncertainty for Indian exporters, especially in sectors sensitive to price competitiveness.
CREDITS: The article has been contributed by Nisha Taneja l Lead International Trade and Investment, ICRIER, New Delhi, India. Member of World Economic Forum’s Global Future Council on Trade and Investment 2020-2022 and 2023-24 leading work stream on Trade and Gender.
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Vasudha Upreti l Researcher, ICRIER | MA Economics, AUD'24 | DGFT, Ministry of Commerce and Industry | BA (H) Economics, Daulat Ram College, DU'22.
The content has not been edited and reviewed by us.
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