China's dominance over India's imports raises concerns
India's trade deficit with China soared to a record $99.2 billion in 2024-25, even as total trade between the two countries reached $127.75 billion.
The main reason? India's exports to China did not perform as expected, while imports—especially in tech-heavy sectors like electronics and solar cells—kept climbing.
Over 75% dependence on China for crucial imports
China now supplies over 75% of some of India's most crucial imports, like antibiotics, silicon wafers, and solar cells.
This heavy reliance makes Indian industries—from pharma to renewable energy—vulnerable if supply chains get disrupted, especially with ongoing tensions between the two countries.
India incentivizes local manufacturing to reduce reliance on China
To tackle this imbalance, India has rolled out incentives for local manufacturing across 14 sectors and tightened quality checks on Chinese goods.
The government hopes these steps will boost homegrown industries and help reduce dependence on Chinese imports going forward.