India’s trade deficit with China is expected to reach $106 billion in 2025 despite a surge in exports to the neighbouring country in November, think tank GTRI said in a note on Friday.
India’s exports to China jumped to $2.2 billion in November 2025, up 90 per cent from a year earlier. For April–November, exports rose 33 per cent to $12.2 billion from $9.2 billion last year.
However, imports are also expected to rise sharply, overshadowing modest gains made from exports. Imports from China may touch ₹123 billion in 2025, pushing the deficit to a record high. A widening trade deficit with China may exert pressure on India’s overall external trade numbers and have a bearing on the currency movement.
Trend picked up post Covid showed falling exports to China and rising import to India, Ajay Srivastava, founder of GTRI, noted. India’s exports to China fell from $23 billion in 2021 to $15.2 billion in 2022 and stayed low through 2024. It is estimated to improve to $17.5 billion in 2025.
In contrast, imports have climbed much faster — from $87.7 billion in 2021 to $102.6 billion in 2022, $91.8 billion in 2023 and $109.6 billion in 2024.
“This has pushed India’s trade deficit with China from $64.7 billion in 2021 to $94.5 billion in 2024, and an expected $106 billion in 2025,” Srivastava observed.
On December 16, in a written reply to the Lok Sabha, minister of state for commerce and industry Jitin Prasada said that the deficit is mainly due to imports of raw materials, intermediate goods and capital goods, like auto components, electronic parts and assemblies, mobile phone parts, machinery and its parts, active pharmaceutical ingredients, which are used for making finished products which are also exported out of India.
According to the GTRI, nearly 80 per cent of India’s imports from China are concentrated in just four product groups — electronics, machinery, organic chemicals and plastics. In contrast, India’s exports to China are driven by petrochemical by-product naphtha, iron ore and shrimp. However, GTRI analysis shows that these products show sharp year-to-year swings, underscoring that they are driven by Chinese demand.