India trade deficit with China crosses $100bn as exports surge

India's trade deficit with China crossed the $100 billion threshold in the first nine months of 2026, reaching $105.93 billion even as Indian exports to its neighbour expanded at their fastest clip in years.

Two-way merchandise trade between January and September rose 25.4% to $144.45 billion, according to official data released by China's General Administration of Customs. Indian imports from China expanded 23.3% to $125.19 billion, propelled largely by capital goods and intermediate industrial components powering domestic factories across India.

At the same time, Indian outbound shipments surged 40.7% to $19.26 billion. That nine-month total has already equalled India's entire export haul to China for 2025, demonstrating the growing reach of Indian manufacturing in high-value sectors.

Bilateral trade figures for January to September 2026

Manufacturing gains shift export composition

While primary goods such as seafood products and naphtha contributed substantially to Indian outbound numbers, the most significant shift emerged in advanced manufacturing. Printed circuit boards, which Indian industry once procured almost entirely from Chinese vendors, became a prominent Indian export to China this year.

The turnaround underscores the rapid operational scaling of domestic electronics manufacturing facilities. Intermediate components imported from China are increasingly processed within Indian supply chains to service both internal consumer demand and outbound shipments, consolidating India's footprint across global value chains.

Prime Minister raises market access with Beijing

The enduring gap between sales and purchases remains a central diplomatic focus for New Delhi. The deficit reached a record $116.12 billion across 2025, prompting targeted bilateral interventions at the highest executive level.

Prime Minister Narendra Modi took up the structural disparity directly with Chinese President Xi Jinping during bilateral talks held on the sidelines of the BRICS summit. New Delhi pressed Beijing to dismantle informal hurdles hindering competitive Indian sectors such as pharmaceuticals and technology services, while addressing recent Chinese restrictions on supplies of fertilisers and rare earth elements.

The Ministry of External Affairs said both leaders underlined the need to resolve structural trade imbalances, stabilise supply chains, and establish meaningful, predictable market access for Indian businesses. China's Foreign Ministry echoed the commitment, noting that both sides agreed to address mutual trade concerns in a balanced manner to foster steady economic ties.

Bilateral ties have maintained a steady trajectory of normalisation following high-level leader discussions in October 2024. As India cements its standing as a global manufacturing powerhouse, New Delhi continues to demand reciprocal access to Chinese commercial markets to ensure balanced external commerce.