Rising Exports to China Help India Partly Reduce Trade Deficit
India’s exports to China have increased significantly, providing partial relief in narrowing the country’s large trade deficit with its biggest trading partner. Data for the first eight months of the current financial year (April to November) shows that higher shipments—particularly of petroleum, electronics, and marine products—have strengthened India’s export performance to China.
According to figures released by the Ministry of Commerce, India exported goods worth USD 12.22 billion to China during the April–November period. This represents a 32.83 percent increase compared to the USD 9.20 billion recorded in the same period of the previous year. The surge in exports contributed to a reduction in India’s trade gap with China.
The trade deficit with China declined to USD 6.64 billion in November, compared with USD 17.06 billion during the same month in the previous year. However, on a cumulative basis, the overall trade deficit with China for the financial year 2024–25 remained high at USD 99.2 billion, indicating that while exports have improved, the imbalance continues to be substantial.
Petroleum products emerged as the largest contributor to export growth, followed by electronics and marine products. In November alone, India’s exports to China increased by 90.12 percent, reaching USD 2.20 billion. Within this, electronics exports rose by 39.96 percent, while petroleum product exports increased by 11.65 percent, highlighting strong demand across multiple industrial segments.
The data also shows that China remains among India’s top five export destinations, alongside the United States, Spain, the United Arab Emirates, and Indonesia. The sharp rise in shipments to China played a key role in strengthening India’s overall export figures during the period under review.
Trade analysts note that the expansion of exports reflects diversification in India’s export basket and growing competitiveness in value-added sectors. At the same time, they caution that the improvement addresses only a portion of the structural trade imbalance between the two economies, as imports from China continue to significantly outpace exports.
The report underscores that while increased access to the Chinese market has offered some relief, long-term correction of the trade deficit will require sustained export growth, deeper market penetration in high-value sectors, and a reduction in dependence on imported intermediate and finished goods.
The article concludes that the rise in exports to China marks a positive development for India’s external trade performance. However, addressing the broader trade imbalance will depend on strategic policy measures, diversification of export products, and continued expansion of India’s presence in key international markets.
