India’s trade deficit with China is worrying – India Trade Deficit With China is worrying
India’s trade deficit with China in FY 2025 has reached around $ 100 billion in the financial year 2025 amid increasing dumping concern.
According to the data released by the Department of Commerce on Wednesday, imports from China in FY 2025 increased by 11.5 percent to $ 113.45 billion, while exports from India to the neighboring country declined by 14.5 percent to $ 14.2 billion. Due to this, India’s trade deficit with China was $ 99.2 billion, which was $ 85 billion a year ago.
Due to the ongoing trade war between the US and China, there has been an increased concern for a sharp increase in exports to India from China, as the two countries are levying heavy taxes on each other, which is above 100 percent. The Government of India fears that due to this, the cost will increase in the US market and especially exporters of countries like China can send their goods to India. Due to this, imports will increase and pressure on India’s domestic industries will increase.
Even during March, imports from China increased by a quarter to $ 9.67 billion, while exports declined by 3 percent to just $ 1.5 billion. The increase in imports from China is due to an increase in imports of electronic goods, electric vehicles batteries, solar cells and some industrial use items.
Ajay Srivastava, founder and former Commerce Ministry official and former Commerce Ministry official Ajay Srivastava said that imports are increasing due to the government’s incentive scheme (PLI), as the industry is very much dependent on imported components. The government has targeted to make India the center of manufacturing through the PLI scheme.
Srivastava said, ‘It is worrying that the exports to China from India have come down by 14.5 percent to $ 14.2 billion. This is less than the exports in 2014, when the rupee was significantly strong. These figures are warning. India needs to invest the internal differences of manufacturing and invest on increasing industrial capacity.
The export to the US from India has increased by 35 percent to $ 10.1 billion in March. The increase was mainly due to sending consignment of goods to the US before the trump fee was implemented from April 9, which has been temporarily banned. This is the main reason for a slight increase of 0.7 percent in goods exports in March, when it has been exported $ 42 billion despite global uncertainty.
In March, imports from the US increased by 9.6 percent to $ 3.7 billion. The business surplus is $ 6.4 billion due to this. During the financial year 2025, imports from the US have increased by 7.4 percent to $ 45.3 billion. America and India were not only a big business partner, but also the same situation in FY 2025. India has the highest turnover with China.
The data released by the Department of Commerce shows that 6 out of 10 export centers of India in March have reduced exports to the United Arab Emirates (UAE), Netherlands, China, Singapore, Saudi Arabia Bangladesh. Exports to Singapore have decreased by 44.3 percent while export to Saudi Arabia has reduced by 18.5 percent, UAE 15 percent, Netherlands 15 percent, Bangladesh 14.8 percent and China 2.9 percent.
Apart from the US, exports have increased to Britain (8.4 percent), Germany (4.3 percent) and Australia (70.8 percent).
Overall India’s imports have increased by 11.4 percent to $ 63.5 billion in March, with 5 of the 10 major import centers, China, USA, UAE, Saudi Arabia and Singapore have played an important role. On the other hand, imports have decreased from South Korea (1 percent), Switzerland (4.5 percent), Indonesia (7.4 percent), Iraq (16.4 percent) and Russia (1.3 percent).
First Published – April 16, 2025 | 10:34 pm IST
