India's trade deficit with China to hit $106B by 2025
What's the story
India's trade deficit with China is projected to reach a staggering $106 billion by 2025. The forecast comes from the Global Trade Research Initiative (GTRI), which highlights that imports are growing at a much faster pace than exports. In its report, GTRI observed that India's exports to China have been on a declining trend since 2021, when they stood at $23 billion.
Export figures
India's exports to China: A declining trend
The GTRI report noted that India's exports to China fell from $23 billion in 2021 to $15.2 billion in 2022. The figure remained low at $14.5 billion in 2023 and slightly increased to $15.1 billion in 2024. For this year, the country is projected to export goods worth $17.5 billion, which is still significantly lower than the earlier levels recorded by GTRI.
Import surge
Rapid increase in imports from China
In stark contrast to the export figures, India's imports from China have skyrocketed. The GTRI report noted that imports surged from $87.7 billion in 2021 to $102.6 billion in 2022. In 2023, the figure fell slightly to $91.8 billion but jumped again to $109.6 billion in 2024. For this year, India's inbound shipments are estimated at a whopping $123.5 billion, further widening the trade deficit with its neighbor country.
Deficit details
Trade deficit with China: A closer look
The widening trade deficit with China is a major concern for India. The GTRI report shows the deficit has ballooned from $64.7 billion in 2021 to $94.5 billion in 2024, and is expected to hit $106 billion by next year. Minister of State for Commerce and Industry Jitin Prasada recently told the Lok Sabha that this deficit mainly stems from imports of raw materials, intermediate goods, and capital goods such as auto components, electronic parts/assemblies among others.
Committee formation
Inter-Ministerial Committee to address trade imbalance
To tackle the growing trade deficit with China, an Inter-Ministerial Committee (IMC) has been formed. The committee will look into import-export trends and suggest corrective measures where needed. According to GTRI, nearly 80% of India's imports from China are concentrated in four product categories: electronics, machinery, organic chemicals, and plastics.
Import breakdown
Electronics lead India's imports from China
From January to October 2025, electronics led India's imports from China at $38 billion. This included mobile phone components ($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 followed at $25.9 billion with transformers alone accounting for $2.1 billion, highlighting India's dependence on Chinese capital goods for power and industrial projects.