India’s trade deficit with China is set to cross $100 billion in 2026, driven by rising imports despite export growth, highlighting structural dependence on Chinese industrial goods.

BulletsIn:

• India’s trade deficit with China crossed $100 billion during April–February period, reaching around $102 billion, marking first time such a high gap recorded in bilateral trade
• Imports from China surged to nearly $119–120 billion, while exports stood much lower at about $17.5 billion, reflecting a widening imbalance in trade structure
• Rising deficit driven by strong dependence on Chinese goods including electronics, machinery, chemicals and pharmaceutical ingredients essential for Indian manufacturing sectors
• Key imported items include electronic components, telecom equipment and industrial inputs, which are difficult to source domestically at competitive scale and cost
• Despite export growth of nearly 30–38% to China, higher import growth continues to widen the trade gap significantly
• China maintains strict market access norms limiting Indian exports, further contributing to persistent trade imbalance between the two countries
• Experts warn that the growing deficit reflects structural economic dependency and may require policy intervention to boost domestic manufacturing and diversify supply chains