India’s trade with China surged past $155 billion in 2025, marking a 12% increase from the previous year, according to Chinese ambassador Xu Feihong, Mint reports. Indian exports to China also rose nearly 10%, but the trade deficit continues to widen as imports remain significantly larger than exports. The gap shows no immediate signs of narrowing, highlighting the ongoing asymmetry in the bilateral economic relationship.
Observers note that global trade patterns and policies could influence future balances. A potential India-US trade deal offering lower tariffs than China faces could create opportunities for India to attract global value chains, diverting some trade flows from China. However, the actual impact would depend on the rules-of-origin set by the United States and the ability to navigate complex geopolitical and economic considerations.
India’s reliance on Chinese inputs for domestic manufacturing adds another layer of complexity. Experts suggest that encouraging Chinese exporters to invest in Indian capacity could create local jobs and strengthen India’s export potential to various markets. While these measures require careful diplomatic coordination, they may offer a pathway to reduce the bilateral trade imbalance over time, Mint notes.
