India’s trade deficit with China is projected to touch $106 billion in 2025 as imports from the neighbouring country continue to grow much faster than exports, according to a report released on Friday by the Global Trade Research Initiative (GTRI).
GTRI data shows that India’s exports to China have remained subdued over the past few years.
Exports fell sharply from $23 billion in 2021 to $15.2 billion in 2022, stayed low at $14.5 billion in 2023, and rose marginally to $15.1 billion in 2024.
In 2025, exports are estimated to improve to $17.5 billion, still well below earlier levels.
In contrast, imports from China have expanded rapidly. They increased from $87.7 billion in 2021 to $102.6 billion in 2022, dipped slightly to $91.8 billion in 2023, and surged to $109.6 billion in 2024. For 2025, imports are estimated at $123.5 billion.
“This has pushed India’s trade deficit with China from $64.7 billion in 2021 to $94.5 billion in 2024, and it is expected to widen further to $106 billion in 2025,” said GTRI founder Ajay Srivastava.
In a written reply to the Lok Sabha on December 16, Minister of State for Commerce and Industry Jitin Prasada said the deficit is largely driven by imports of raw materials, intermediate goods, and capital goods such as auto components, electronic parts, machinery and equipment, mobile phone components, and active pharmaceutical ingredients (APIs).
These inputs are used to manufacture finished goods in India, many of which are exported.
Prasada added that an inter-ministerial committee has been constituted to analyse import-export trends and recommend corrective measures where required.
According to GTRI, nearly 80% of India’s imports from China are concentrated in just four product groups: electronics, machinery, organic chemicals, and plastics.
During January–October 2025, electronics imports from China alone stood at $38 billion. This included mobile phone components worth $8.6 billion, integrated circuits ($6.2 billion), laptops ($4.5 billion), solar cells and modules ($3 billion), flat-panel displays ($2.6 billion), lithium-ion batteries ($2.3 billion), and memory chips ($1.8 billion).
Machinery imports followed at $25.9 billion, with transformers accounting for $2.1 billion, highlighting India’s dependence on Chinese capital goods for power and industrial projects. Organic chemicals imports reached $11.5 billion, driven by antibiotics worth $1.7 billion, underscoring China’s dominance in pharmaceutical intermediates.
Plastics imports during the period stood at $6.3 billion, including $871 million of PVC resin, while steel and steel products amounted to $4.6 billion. Medical and scientific equipment imports added another $2.5 billion.
“Together, these figures show that India’s import bill from China is anchored in electronics, machinery, chemicals, and materials that are difficult to substitute quickly, which explains the persistence of a large bilateral trade deficit despite efforts to diversify supply chains,” Srivastava said.
There were some signs of improvement on the export front.
In November, India’s exports to China rose 90% year-on-year to $2.2 billion. During April–November, exports increased 33% to $12.2 billion, driven mainly by higher shipments of naphtha used in the plastics industry, as well as growth in electronics exports such as printed circuit boards and mobile phone components.