India’s merchandise trade with China reached a record level during the first half of 2026, highlighting the continued strength of commercial ties despite ongoing geopolitical differences. The latest trade figures show significant growth in both imports and exports compared to the same period last year, reflecting rising demand across multiple sectors.
Imports from China Register Sharp Growth
Between January and June 2026, India’s merchandise imports from China increased to $79.41 billion, compared with $65.2 billion during the corresponding period in 2025. The rise underscores India’s continued dependence on Chinese supplies for electronics, machinery, industrial equipment, chemicals, pharmaceutical ingredients, and manufacturing components.
The increase also reflects stronger industrial activity and growing domestic demand for raw materials and intermediate goods used across India’s manufacturing sector.
Indian Exports to China Also Improve
India’s merchandise exports to China recorded healthy growth during the same period. Exports climbed to $12.31 billion in the first half of 2026, up from $8.97 billion during January–June 2025.
Higher shipments of minerals, petroleum products, agricultural commodities, chemicals, engineering goods, and other industrial products contributed to the improvement in export performance.
Trade Deficit Continues to Remain Significant
Although exports registered steady growth, imports continued to outpace outbound shipments by a wide margin. As a result, India’s trade deficit with China remained substantial, reinforcing the government’s long-term objective of expanding domestic manufacturing and strengthening supply chain resilience.
Officials have repeatedly stressed the importance of increasing export competitiveness while encouraging greater domestic production under initiatives aimed at reducing import dependence.
Economic Significance
The latest figures demonstrate that China remains one of India’s largest trading partners despite strategic and diplomatic differences. Growing bilateral trade also reflects the deep integration of global manufacturing supply chains, where Indian industries continue to rely on Chinese components while simultaneously expanding exports to one of the world’s largest consumer markets.
As both economies continue to grow, policymakers are expected to focus on balancing trade, diversifying supply chains, and encouraging higher-value exports in the coming years.