India’s Heavy Reliance On China For Industrial Imports Raises Risks: GTRI

New Delhi, Apr 28 (KNN) Global Trade Research Initiative (GTRI) on Tuesday flagged India’s high dependence on China for critical industrial imports, warning of potential risks to key sectors.

China accounted for about 16 per cent of India’s total imports in 2025–26, with shipments worth USD 131.63 billion out of total imports of USD 774.98 billion. However, its share in industrial goods is significantly higher at 30.8 per cent.

Sectoral Exposure

Around 66 per cent of imports from China—valued at USD 82.6 billion—are concentrated in electronics, machinery, computers, and organic chemicals, PTI reported, citing an analysis by GTRI. 

China supplies 43 per cent of India’s electronics imports, 40 per cent of machinery and computers, and 44 per cent of organic chemicals, making it a key source of core manufacturing inputs.

Supply Chain Risks

GTRI Founder Ajay Srivastava said, "These are not discretionary purchases but core inputs that feed directly into India's manufacturing ecosystem," as quoted by PTI.

Heavy reliance on Chinese inputs like EV batteries, solar modules, APIs, and specialty chemicals exposes India to geopolitical and commercial disruptions, he added.

"As a result, even as India tries to grow exports, its supply chains remain tied to China. This creates clear risks," Srivastava noted.

Trade Imbalance

India’s exports to China remain subdued at USD 19.5 billion, while imports have more than doubled in recent years, widening the trade deficit to USD 112.1 billion in 2025–26.

Policy Suggestions

GTRI recommended building domestic capacity and diversifying supply chains, suggesting that dependence on any single country in critical sectors be capped below 30 per cent to reduce vulnerability.

(KNN Bureau)