India’s exports to China surged by 90 per cent year-on-year in November to $2.2 billion, but a new analysis cautions that the spike masks deeper structural weaknesses and a sharply widening trade deficit.
According to a report by the Global Trade Research Initiative (GTRI), India’s exports to China remain highly volatile and narrowly concentrated, while imports from the neighbouring country continue to rise steadily, deepening economic dependence.
Export surge driven by a narrow product basket
GTRI noted that from April to November, India’s exports to China grew by 33 per cent to $12.2 billion, compared to $9.2 billion in the same period last year. However, this growth is not broad-based.
“India’s export growth to China is concentrated mainly in naphtha and a few atypical electronics products, rather than across India’s traditional export basket,” the report said.
GTRI founder Ajay Srivastava explained that naphtha was the single largest contributor, with exports rising sharply due to strong Chinese demand for petrochemical feedstocks. Electronics exports also showed unusually high growth, including printed circuit boards and mobile phone components—items that India otherwise imports heavily from China.
In contrast, exports of iron ore continued to decline, while shrimp exports showed only modest growth, highlighting the uneven nature of India’s export performance.
Fluctuations reflect dependence on Chinese demand
GTRI pointed out that India’s top exports to China—naphtha, iron ore and shrimps—have shown large year-to-year swings, driven more by shifts in Chinese demand, prices and policies than by a stable Indian export strategy.
“This uneven pattern shows that India’s key exports to China lack consistency and durable market access,” the report said, adding that such volatility limits long-term gains.
Imports from China remain entrenched
On the import side, India’s dependence on China remains strong. Electronics, machinery, plastics and organic chemicals account for nearly 80 per cent of imports. From January to October 2025, electronics imports alone stood at $38 billion, including mobile phone components, integrated circuits and lithium-ion batteries.
Machinery imports reached $25.9 billion, reflecting reliance on Chinese capital goods, while organic chemicals imports—driven by antibiotics—underscored China’s dominance in pharmaceutical intermediates.
Trade deficit hits record levels
GTRI warned that India’s trade deficit with China is touching new highs. Imports are projected at $123.5 billion in 2025, while exports are expected to reach only $17.5 billion, resulting in a deficit of around $106 billion. Chinese customs data suggests the gap may be even wider.
“Without a sustained strategy to boost competitive manufacturing, reduce import dependence and strengthen trade monitoring, short-term export spikes will not alter the fundamentally imbalanced nature of India–China trade,” the report concluded.