India-China trade: India’s exports to China rise in 2025, deficit climbs to record $116 bn
India’s shipments to China posted a rare year-on-year increase in 2025, even as the bilateral trade gap ballooned to an all-time high, underlining the persistent imbalance in the two-way economic relationship, PTI reported.Data released by Chinese customs on Wednesday showed that Indian exports to China rose by $5.5 billion during January–December 2025, taking total outbound shipments to $19.75 billion — a 9.7 per cent increase over the previous year. This marks a notable departure from years of stagnation in India’s exports to its largest trading partner.However, the improvement was overshadowed by a sharper rise in Chinese exports to India, which grew 12.8 per cent to $135.87 billion. As a result, India’s trade deficit with China widened to a record $116.12 billion, crossing the $100-billion threshold for the second time since 2023.Overall bilateral trade touched an all-time high of $155.62 billion in 2025, reflecting strong trade momentum between the two economies despite heightened global uncertainties and tariff hikes imposed by US President Donald Trump during the year.The widening gap contrasts with 2024, when India’s trade deficit with China stood at $99.21 billion. That year, China exported goods worth $113.45 billion to India, while India’s exports remained stuck at $14.25 billion.China reports its trade figures on a calendar-year basis, while India follows an April–March accounting year, which limits direct year-on-year comparisons.Industry watchers said the rise in Indian exports, though modest relative to the size of the trade relationship, signals a gradual diversification of India’s export basket to China. Products such as oil meals, marine items, telecom equipment and spices have begun gaining traction in the Chinese market, which is currently facing weak domestic consumption growth.India has consistently urged China to provide greater market access in sectors where Indian firms have a comparative advantage, including information technology services, pharmaceuticals and agricultural products.China’s own trade performance remained resilient despite tensions with the US. Customs data showed that China’s global trade surplus surged nearly 20 per cent year-on-year to almost $1.2 trillion in 2025. Exports stood at $3.77 trillion, while imports were valued at $2.58 trillion.Officials in Beijing attributed the export strength to diversification efforts. Wang Jun, vice-minister of the General Administration of Customs, said supportive policies and the depth of China’s industrial base helped offset external headwinds.“Our trading partners are increasingly diversified, and our risk-resilience has significantly strengthened,” Wang told the Hong Kong-based South China Morning Post.Economists, however, cautioned against extrapolating the trend too far. Gary Ng, senior Asia-Pacific economist at French investment bank Natixis, said external demand may moderate as global monetary easing cycles approach their limits.“I think Chinese exports will continue to grow in 2026, but at a slightly slower pace,” Ng told the newspaper.
