India and China remain two of Asia’s largest trading economies, and their commercial ties shape supply chains, prices, and investment flows across the region. In 2025, the basic picture is clear. China is still India’s largest source of merchandise imports, and the bilateral trade gap is wide. India is working to narrow that gap by boosting manufacturing, using trade remedies where needed, and deepening partnerships outside China. This article explains where the numbers stand today, which sectors drive the gap, and what to watch through 2025.
Table of Contents
The headline numbers
Official data for India’s fiscal year 2024 to 2025 show bilateral goods trade of around 128 billion dollars, with a record trade deficit for India of 99.2 billion dollars. India exported about 14.25 billion dollars to China and imported about 113.5 billion dollars from China. These figures come from Indian trade data reported in April and late August 2025 and reflect a further widening from 2023 to 2024.
Chinese sources report a similar scale for the calendar year 2024. China’s customs data and business briefings indicate exports to India of about 120 to 121 billion dollars and imports from India of about 18 billion dollars, for total trade near 138 billion dollars. Differences arise because India reports by fiscal year and uses different valuation points, but the story is the same. China sells far more goods to India than it buys.
Who is leading in 2025
If we define leading as the side with the larger goods export footprint in the bilateral relationship, China leads by a wide margin in 2025. China is India’s top import source and one of India’s top trading partners overall. The deficit is driven by categories where China has deep scale. These include electronics, telecom equipment, active pharmaceutical ingredients, machinery, chemicals, and components that feed Indian manufacturing and consumer demand.
If we look at momentum and diversification, India is making gains. India’s finished steel imports from China and Japan fell sharply in April to May 2025 compared with a year earlier, which hints at selective relief in sensitive sectors. India’s commerce ministry data also show steady overall export performance through mid-2025 despite weaker global demand, helped by services and non-petroleum goods.
What is inside the gap
Three structural features keep the gap large.
- Electronics and machinery inputs
Indian firms import phones, components, networking gear, power equipment, and industrial machinery at scale from China. These inputs support India’s growth in assembly and infrastructure, but inflate the import bill. Reuters attributed much of the 2024 to 2025 widening to electronics and consumer durables. - Chemicals and pharma ingredients
India is a major exporter of finished medicines, but it depends on imports of bulk drugs and intermediates. This upstream reliance adds to the deficit and is hard to reverse quickly. - Price and scale effects
Chinese manufacturers benefit from large volumes and efficient logistics across many product lines. That makes it difficult for Indian buyers to switch in the short run without cost increases, as recent editorials and analyses note.
How India is responding in 2025
Targeted trade actions and standards. India has used anti-dumping duties, quality control orders, and import monitoring in categories where there is proven injury to domestic producers. The aim is not a blanket curb but a push for fair pricing and safety standards.
Make in India and supply chain incentives. Production Linked Incentive schemes continue in electronics, solar, batteries, and pharma intermediates to build local capacity. Progress is uneven, but the share of domestic assembly in smartphones and components has risen over recent years.
Diversification of partners. India is opening and upgrading trade with partners across West Asia, Southeast Asia, and Europe, while using forums like the Quad, IPEF, and bilateral FTAs to reduce single-source exposure. Oxford Analytica’s recent brief underlines that rebalancing will be gradual because many Indian industries still rely on Chinese inputs.
Services and digital exports. India’s strength in IT and business services helps the overall external balance even when the goods deficit is large. Government releases through mid-2025 show services exports supporting the current account.
What Chinese data say about 2025 trends
Monthly trackers show China’s exports to India remained strong into mid-2025. OEC’s near real-time view reported China shipping about 11.1 billion dollars to India in May 2025, up more than 12 percent year on year. That aligns with the broad picture that Chinese manufacturers continue to supply Indian demand for machinery and electronics even as some categories face scrutiny.
The policy backdrop
Leaders on both sides have kept an eye on economic normalisation during 2025. Coverage of the late August meetings noted an interest in stabilising ties, easing travel and supply restrictions, and addressing trade frictions. The headline goal for India is to keep markets open for what it needs while pushing for fair treatment of its exports and fewer non-tariff barriers in China.
Sector snapshots to watch
Electronics and ICT. Any increase in local component production or investment in semiconductor packaging would slow import growth from China over time. Until then, this category will anchor the deficit.
Metals and industrial inputs. The drop in finished steel imports at the start of FY 2025 is encouraging for Indian mills, but global prices and domestic demand will decide whether the trend sustains.
Pharma and chemicals. Government support for bulk drug parks and API capacity is a medium-term play. Expect gradual gains rather than quick substitution.
Renewables and power equipment. India continues to import solar modules and key components while building local capacity. Standards and tenders will shape sourcing choices here.
Conclusion
On the numbers, China leads in bilateral goods trade with India in 2025. China sells far more to India than it buys, and the gap reached about 99 billion dollars in FY 2024 to 2025. India’s response is to protect key sectors, build capacity at home, and broaden trade ties elsewhere. Some early signs, like lower steel imports and resilient overall exports, suggest the deficit can narrow in specific lines. But given the scale of Chinese manufacturing, the shift will take time. For businesses, the practical approach in 2025 is to keep diversifying suppliers, track standards and duties in sensitive categories, and watch policy signals from both capitals.
Reference: Reuters, The Times of India, China Briefing, The Economic Times
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