Rising Trade Deficit: India's Growing Reliance on Chinese Imports

India's trade deficit with China is projected to reach USD 106 billion by 2025, as imports outpace exports. Despite a slight improvement in exports, the gap is largely due to rising imports of electronics, machinery, and chemicals. An Inter-Ministerial Committee is evaluating the situation for potential corrective measures.

India's trade deficit with China is on a trajectory to hit USD 106 billion by 2025, driven by a significant imbalance between imports and exports, according to think tank Global Trade Research Initiative (GTRI).

The country's exports to its neighbor have been consistently low, despite a slight improvement projected for 2025. Imports, on the other hand, have surged, with electronics, machinery, and chemicals being the primary contributors.

The Indian government has acknowledged this issue, attributing the deficit mainly to the import of essential raw materials and components. An Inter-Ministerial Committee is tasked with assessing import-export trends and recommending appropriate actions.