China has surpassed the United States to emerge as India’s largest trading partner in FY26, driven by rising imports, export growth, and a widening bilateral trade imbalance.

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• China emerged as India’s leading trading partner in FY26 with total bilateral trade reaching approximately USD 151 billion, indicating a major shift in India’s global trade dynamics.
• The United States lost its top position after four consecutive years, as overall trade growth between India and the US remained comparatively slower during the financial year.
• India’s imports from China increased significantly by around 16 percent, reaching over USD 131 billion, reflecting heavy reliance on Chinese goods across manufacturing and industrial sectors.
• Exports from India to China also witnessed strong growth of over 36 percent, touching nearly USD 19.5 billion, although still considerably lower than import levels.
• The trade deficit between India and China widened sharply to over USD 112 billion, highlighting a persistent imbalance in bilateral trade relations.
• Trade with the United States showed moderate growth, with both exports and imports increasing, but India’s trade surplus with the US narrowed during FY26.
• Other global markets such as the UAE, Germany, and Brazil showed positive export trends for India, while exports to countries like the UK and Netherlands declined.
• The development reflects changing global trade patterns, where supply chain dependencies and import-driven growth continue to influence India’s economic partnerships with major economies.