India's trade relationship with China is undergoing a significant transformation, with the northern neighbor rapidly becoming a crucial export market. This shift hints at a potential long-term change in the economic dynamics between the two most populous nations globally.
Sharp 33% Rise in Exports to China
According to data from the commerce ministry cited by PTI, Indian shipments to China increased sharply by 33% to $12.22 billion during the April-November period of the current financial year (2024-25). This impressive growth comes against the backdrop of cooling trade relations with the United States, where hefty tariffs imposed by the Trump administration have made exports less competitive.
An exporter confirmed to PTI that Indian industries are actively diversifying their markets. The high tariffs in the US, including a 50% duty on certain Indian goods, have compelled businesses to seek more viable and competitive destinations for their products.
What's Driving the Export Boom?
The export surge is not limited to a single sector but is broad-based, indicating a healthy and diversified demand for Indian goods in the Chinese market. Key drivers include:
- Electronics & Telecom: A massive jump was seen in exports of populated printed circuit boards, soaring from $23.9 million to $922.4 million. Flat panel display modules and other telephony apparatus also contributed significantly.
- Agricultural & Marine Products: Strong shipments of dried chillies, black tiger shrimp, green gram, Vannamei shrimp, and oil-cake residues fueled growth.
- Base Metals: Exports of aluminium and refined copper billets also saw notable increases.
An official noted that this spread across sectors suggests the export surge represents a broader structural expansion rather than a temporary spike in a few commodities.
Reversing the Decline and Narrowing the Trade Gap
The sharp jump to $12.22 billion in 2025-26 is particularly noteworthy as it reverses the decline recorded in the previous year. For context, exports were $9.89 billion in April-November 2022-23 and $10.28 billion in 2023-24. The current figure marks the highest level of exports to China in the past four years.
This export momentum has also played a role in improving India's overall trade balance. The country's trade deficit narrowed sharply to $24.53 billion in November from $41.68 billion in October. This improvement was supported by India posting its highest merchandise exports for November in at least a decade, driven by rising shipments to the US, UAE, and China.
The data underscores a pivotal moment in India's trade strategy, as it successfully cultivates alternative markets to ensure resilient and sustainable export growth in the face of global economic headwinds.
