New Delhi [India], December 19 : India's trade deficit with China is expected to widen further, even as exports to the neighbouring country have shown sharp but volatile spikes this year, according to a study by the Global Trade Research Initiative (GTRI).
The report notes that India's exports to China surged nearly 90 per cent year-on-year in November 2025 to USD 2.2 billion, largely driven by a narrow set of products rather than broad-based growth. For April-November 2025, exports rose 33 per cent to USD 12.2 billion. However, the gains were concentrated mainly in naphtha and a few atypical electronics items, underscoring the fragility of India's export performance.
Naphtha emerged as the single largest contributor, with exports jumping more than five-fold in October and rising 172 per cent during April-October to USD 1.4 billion, reflecting strong Chinese demand for petrochemical feed-stocks. The study also highlighted extraordinary spikes in electronics exports, including printed circuit boards and mobile phone components, even as India remains a large net importer of these items from China.
In contrast, traditional exports such as iron ore and shrimp remained volatile or weak. Iron ore exports fell 30 per cent during April-October, while shrimp exports recorded only modest growth. GTRI said the top three Indian exports to China, naphtha, iron ore and shrimp, show sharp year-to-year swings, driven more by Chinese demand cycles than by any stable or diversified export strategy.
GTRI said that despite the recent export rebound, India's imports from China have continued to rise sharply. Imports are estimated to reach USD 123.5 billion in 2025, pushing the bilateral trade deficit to a record USD 106 billion on Indian data. Chinese customs data suggest an even wider gap, with the 2025 deficit estimated at over USD 115 billion.
Nearly 80 per cent of India's imports from China are concentrated in electronics, machinery, organic chemicals and plastics. Electronics imports alone touched USD 38 billion in the first ten months of 2025, reinforcing India's supply-chain dependence on China, the report said.
The study, however, also pointed to persistent discrepancies between Indian and Chinese trade data, noting that India reports lower imports from China than China reports as exports, an unusual pattern that may indicate under-invoicing and warrants closer scrutiny by customs authorities.
GTRI noted that without a sustained push to expand competitive manufacturing, reduce import dependence in critical sectors and strengthen trade monitoring, short-term export spikes will do little to correct the structurally imbalanced nature of India-China trade.
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