The trade deficit between India and China has widened significantly, reaching US99.2billioninthefinancialyear2024−25,upfromUS85.1 billion in the previous year. Despite healthy bilateral trade growth, the imbalance remains sharply in China’s favor. This deficit accounts for about 35% of India’s total trade imbalance.
The article notes that China dominates India’s import market for a wide range of products, from pharmaceuticals and electronics to consumer goods. This over-reliance on a single country for critical inputs creates a risk, as China could use supply chains as leverage during times of political tension. To address this, India has implemented measures such as production-linked incentive schemes, stricter quality standards, and anti-dumping duties to boost domestic manufacturing and protect local firms. The government is also encouraging businesses to diversify their supply chains and explore alternative suppliers.