India’s Trade Deficit With China Expected To Hit USD 106 Bn In 2025: GTRI

New Delhi, Dec 19 (KNN) India’s trade deficit with China is projected to hit USD 106 billion in 2025, as imports continue to outpace exports, according to a report by the Global Trade Research Initiative (GTRI) released Friday (December 19, 2025).

India’s exports to China have remained relatively stagnant over recent years. They fell from USD 23 billion in 2021 to USD 15.2 billion in 2022, dipped slightly to USD 14.5 billion in 2023, and rose marginally to USD 15.1 billion in 2024. For 2025, exports are estimated at USD 17.5 billion, still below levels seen in 2021.

In contrast, imports from China have risen sharply, climbing from USD 87.7 billion in 2021 to USD 102.6 billion in 2022, USD 91.8 billion in 2023, and USD 109.6 billion in 2024. For 2025, inbound shipments are estimated at USD 123.5 billion. 

"This has pushed India's trade deficit with China from USD 64.7 billion in 2021 to USD 94.5 billion in 2024, and an expected USD 106 billion in 2025," GTRI Founder Ajay Srivastava said, reported PTI.

Composition of Imports and Strategic Implications

The GTRI noted that nearly 80 per cent of India’s imports from China are concentrated in four product categories: electronics, machinery, organic chemicals, and plastics. 

Electronics alone accounted for USD 38 billion during January–October 2025, including mobile phone components (USD 8.6 billion), integrated circuits (USD 6.2 billion), laptops (USD 4.5 billion), solar cells and modules (USD 3 billion), flat-panel displays (USD 2.6 billion), lithium-ion batteries (USD 2.3 billion) and memory chips (USD 1.8 billion).

Machinery imports followed at USD 25.9 billion, with transformers accounting for USD 2.1 billion, highlighting India’s reliance on Chinese capital goods for power and industrial projects. 

Organic chemicals totaled USD 11.5 billion, largely driven by USD 1.7 billion in antibiotic imports, indicating China’s dominance in pharmaceutical intermediates. 

Plastics imports amounted to USD 6.3 billion, including USD 871 million of PVC resin, while steel and steel products stood at USD 4.6 billion and medical and scientific equipment at USD 2.5 billion.

"Together, these figures show that India's import bill from China is anchored in electronics, machinery, chemicals and materials that are difficult to substitute quickly, explaining the persistence of a large bilateral trade deficit despite efforts to diversify supply chains," Srivastava noted.

Government Response

Minister of State for Commerce and Industry Jitin Prasada, in a written reply to the Lok Sabha on December 16, attributed the trade deficit largely to imports of raw materials, intermediate goods, and capital goods—including auto components, electronic assemblies, machinery, active pharmaceutical ingredients and mobile phone parts—which are also used to manufacture products for export.

"An Inter-Ministerial Committee (IMC) has been constituted to consider the trends with respect to imports and exports and recommend corrective action wherever required," he added.

(KNN Bureau)