India-China Trade Update: India’s Exports to China Increase in 2025, Trade Deficit Reaches Record $116 Billion
India’s trade relationship with China saw a significant shift in 2025, as Indian exports to China experienced a rare year-on-year increase. Despite this positive development, the trade deficit between the two nations reached an unprecedented high, highlighting the ongoing imbalance in their economic interactions. Data from Chinese customs revealed that Indian shipments rose by $5.5 billion, totaling $19.75 billion for the year, while Chinese exports to India surged even more, exacerbating the trade gap to $116.12 billion.
Growth in Indian Exports
In 2025, Indian exports to China increased by 9.7 percent compared to the previous year, marking a notable turnaround after years of stagnation. This rise brought total exports to $19.75 billion, a significant improvement that industry experts view as a step towards diversifying India’s export portfolio. Key products contributing to this growth included oil meals, marine items, telecom equipment, and spices, which have begun to gain traction in the Chinese market. This diversification comes at a time when China is grappling with weak domestic consumption growth, indicating a potential shift in trade dynamics.
Record Trade Deficit
Despite the increase in Indian exports, the trade deficit with China widened dramatically, reaching a record $116.12 billion. This figure surpassed the $100 billion mark for the second time since 2023. Chinese exports to India rose by 12.8 percent, totaling $135.87 billion, further illustrating the imbalance in the trade relationship. In contrast, the previous year, India’s trade deficit stood at $99.21 billion, with exports lagging significantly behind Chinese shipments. The overall bilateral trade volume reached an all-time high of $155.62 billion in 2025, underscoring the robust trade momentum between the two countries amid global economic uncertainties.
China’s Resilient Trade Performance
China’s trade performance remained strong in 2025, with a global trade surplus of nearly $1.2 trillion, reflecting a year-on-year increase of almost 20 percent. The country’s exports amounted to $3.77 trillion, while imports were valued at $2.58 trillion. Officials in Beijing attributed this resilience to diversification efforts within their trade partnerships. Wang Jun, vice-minister of the General Administration of Customs, emphasized that supportive policies and the depth of China’s industrial base have helped mitigate external challenges. This diversification has strengthened China’s risk resilience, allowing it to navigate tensions with trading partners, including the United States.
Future Outlook and Economic Considerations
While the increase in Indian exports to China is a positive sign, economists urge caution regarding future trends. Gary Ng, a senior Asia-Pacific economist at Natixis, noted that while Chinese exports are expected to continue growing in 2026, the pace may slow down as global monetary easing cycles reach their limits. This perspective highlights the need for India to continue advocating for greater market access in sectors where it holds a competitive advantage, such as information technology services, pharmaceuticals, and agricultural products. As both nations navigate their complex economic relationship, the focus will likely remain on addressing the trade imbalance while fostering mutual growth.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
Follow Us on Twitter, Instagram, Facebook, & LinkedIn
