Chennai: India’s trade deficit with China widened to $102 billion in the 11 months of FY26, already surpassing the trade deficit of FY25. Total imports of both goods and services touched $900 billion in the 11-month period and is expected to be above $1 trillion in FY26.
The trade deficit with China continued to widen in February with India’s growing dependence on Chinese industrial supplies. Exports to China totaled $17.5 billion during April–February, while imports surged to $119.6 billion, leaving a $102.1 billion deficit.
The imports from China in February alone grew by 30 per cent and for the period between April and February, it grew by 15.2 per cent.
The gap is projected to widen further to about $111.4 billion for the full year, finds GTRI.
“The imbalance reflects India’s reliance on Chinese components and industrial inputs, including electronics parts, electric-vehicle batteries and components, solar cells and modules, machinery, organic chemicals and pharmaceutical ingredients, which remain difficult to source domestically,” it said.
In FY25, the trade deficit with China stood at $99.2 billion. It has risen from $1.1 billion in 2003-04 to $99.2 billion in 2024-25. China’s trade deficit accounted for about 35 per cent of India’s total trade imbalance of $283 billion in the last fiscal. The trade deficit was $85.1 billion in 2023-24.
The total imports of goods and services touched $900.5 billion between April and February is most likely to cross $1 trillion in FY26. In FY25, total imports stood at $915 billion.
Meanwhile, India’s exports to the US reached $79.3 billion during April–February, up 3.8 per cent from a year earlier, despite the high tariffs on several products. “At the current pace, exports to the US—India’s largest export market—are expected to reach about $86.5 billion in the fiscal year ending March 2026,” finds GTRI. In FY25, India had exported goods valued at $86.5 billion in FY 2024‑25. Even with the higher tariffs, India managed to maintain the goods exports in FY26.
Due to the US-imposed restrictions on buying crude oil from Russia, the imports from the country dipped 13 per cent in February and 12 per cent between April and February.
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