Last updated: 15 October 2026. Calendar-year figures are from China’s customs data released on 14 October; fiscal-year figures are from India’s Commerce Ministry.
India’s trade deficit with China has crossed $100 billion in just the first nine months of 2026. Between January and September, India imported $125.19 billion of goods from China and exported only $19.26 billion, leaving a gap of $105.93 billion, about ₹10.2 lakh crore. That is up 20.7% from the same period last year.
Put simply, India buys about $6.5 of Chinese goods for every $1 it sells to China. With three months still to go, 2026 is set to break the record deficit of $116.12 billion set in 2025.
Key takeaways
- India’s deficit with China hit $105.93 billion in January–September 2026, up 20.7% year on year.
- India’s exports to China jumped 40.7%, but from such a small base that imports, up 23.3%, grew by far more in dollar terms.
- At the July–September pace of roughly $13 billion a month, the full-year 2026 deficit could reach about $140–145 billion, a new record.
- Electronics, machinery, chemicals and plastics make up around 80% of what India buys from China, much of it parts that Indian factories assemble into finished goods.
The numbers
| January–September 2026 | Amount | Change from a year ago |
|---|---|---|
| China’s exports to India (India’s imports) | $125.19 billion | +23.3% |
| India’s exports to China | $19.26 billion | +40.7% |
| India’s trade deficit with China | $105.93 billion | +20.7% |
| Total two-way trade | $144.45 billion | +25.4% |
The gap widened faster as the year went on. At the end of June it stood at about $67.1 billion, so roughly $38.8 billion was added in July–September alone.
How the deficit has grown
The deficit has roughly doubled in five years. India’s own data, compiled by the think tank GTRI, shows it rising from $64.7 billion in 2021 to $94.5 billion in 2024. China’s customs data puts the 2025 figure at a record $116.12 billion.
India’s fiscal-year numbers tell the same story. In FY2025-26 (April 2025 to March 2026), India imported $131.63 billion from China, exported $19.47 billion, and ran an all-time-high deficit of $112.6 billion, up from $99.2 billion the year before.
Indian and Chinese figures never match exactly. China reports by calendar year and India by April–March fiscal year, and the two countries record shipments differently. But both show the same trend.
What India buys from China
About 80% of India’s imports from China fall into four groups. GTRI’s breakdown for January–October 2025 gives a sense of scale:
| Category | Imports from China | Examples |
|---|---|---|
| Electronics | $38 billion | Mobile phone parts ($8.6 bn), chips ($6.2 bn), laptops ($4.5 bn), solar cells and modules ($3 bn), displays ($2.6 bn), lithium-ion batteries ($2.3 bn), memory chips ($1.8 bn) |
| Machinery | $25.9 billion | Industrial equipment, transformers |
| Organic chemicals | $11.5 billion | Drug ingredients, including antibiotics ($1.7 bn) |
| Plastics | $6.3 billion | PVC resin and other raw materials |
Electronics is the biggest single driver. In FY26, electrical and electronic goods alone accounted for $43.1 billion of the deficit, roughly double the level of FY19.
Why booming exports can’t close the gap
India’s exports to China grew 40.7% this year, helped by printed circuit boards, display modules, naphtha and refined fuels, and seafood. That sounds impressive, but the base is tiny. A 40.7% rise on about $14 billion adds roughly $5.6 billion. A 23.3% rise on about $102 billion of imports adds more than $23 billion. The gap grows even when exports grow faster.
There are deeper reasons too:
- Assembly needs Chinese parts. India’s manufacturing push, especially in mobile phones and electronics, has mostly meant assembling products from imported components. The more phones India makes, the more parts it buys from China.
- A narrow export basket. India mostly sells China raw materials and simple goods such as ores, fuels, seafood and farm products, while it buys a wide range of manufactured and capital goods.
- Market access. India has long pushed China to open up to Indian IT services, medicines and farm products, where Indian companies are competitive, with little success. Indian exporters also cite non-tariff barriers, approvals and standards.
- Price. For many goods, from solar modules to chemicals, Chinese suppliers are simply cheaper and produce at a scale Indian firms cannot yet match.
Why it matters
For the rupee. Every dollar of imports has to be paid for. A deficit of this size adds to the demand for dollars and puts pressure on the rupee, which is already near 97 to the dollar (see what the weak rupee costs you).
For supply chains. Depending on one country for critical inputs is a risk. If China restricts exports of rare earths, India’s electronics, electric vehicle, renewable energy and defence production could be disrupted. Restrictions on fertiliser inputs could raise costs for farmers and feed into food inflation.
For Indian companies. Many Indian manufacturers, from electronics assemblers to drug makers and solar companies, rely on Chinese inputs. Cheap imports keep their costs down but also make them vulnerable to sudden price rises or supply cuts. At the same time, Chinese imports compete directly with Indian makers of steel, chemicals and consumer goods.
What India is doing about it
The government has tried several levers: production-linked incentive (PLI) schemes to make more components at home, quality-control orders and anti-dumping duties on some Chinese goods, and diplomatic pressure for better market access. India’s Ministry of External Affairs says both sides have agreed to address the “structural trade imbalance” and supply-chain issues, while China’s foreign ministry has called for handling each side’s concerns “in a balanced way”.
The numbers suggest these efforts have not yet changed the overall picture. Building a domestic supply base for components, chemicals and machinery takes years, and until it exists, India’s manufacturing growth will keep pulling in Chinese imports.
Frequently asked questions
What is India’s trade deficit with China in 2026?
$105.93 billion for January–September 2026, according to Chinese customs data. India imported $125.19 billion from China and exported $19.26 billion.
Is this a record?
Not yet for a full year. The 2025 deficit was a record $116.12 billion. With about $10 billion more needed and the gap growing by roughly $13 billion a month, 2026 is very likely to set a new record.
What does India import most from China?
Electronics, including phone components, chips, laptops, solar cells and batteries, followed by machinery, organic chemicals and plastics. These four groups make up about 80% of imports.
Why don’t India’s growing exports reduce the deficit?
Because India’s exports start from a much smaller base. Even 40% export growth adds fewer dollars than 23% import growth, so the gap keeps widening.
Sources
- January–September 2026 figures, 2025 record and FY26 electronics deficit: Maritime Gateway
- FY2025-26 Commerce Ministry data: ETV Bharat
- Export drivers, supply-chain risks and official statements: Goodreturns
- Deficit trend 2021–2024 and import breakdown: Business Standard (GTRI)
Disclaimer: This article is for information only and is not investment advice. Rupee conversion uses about 96.7 rupees to the dollar. The full-year 2026 projection is our estimate based on the July–September pace.
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