India's exports of merchandise to China have recorded robust momentum in 2025-26, posting double-digit growth in the first few months of the financial year.
The exports cumulatively amounted to $5.76 billion during the first four months, a 20% gain from $4.80 billion in the same period in 2024-25. The growth has been led mostly by energy, electronics, and farm products, and is hoped to help offset losses due to US tariffs to some extent.
Government statistics report that India's exports to China increased at an annualized 19.97% rate in the first four months of 2025-26, turning around a 4.5% year-on-year fall recorded in April-July 2024.
If this trend keeps going, India is likely to report positive growth in exports to China for this fiscal year," the people said, on condition of anonymity. In comparison, merchandise exports to China dropped 14.5% to $14.25 billion in 2024-25 from $16.67 billion in 2023-24.
In the previous year, shipments to China declined during 11 of the last 12 months, with May 2024 being the sole exception. In contrast, FY26 has seen sequential improvements in shipments since April. During April, exports increased by 12.9% year-on-year at $1.4 billion; May posted a 24% growth at $1.63 billion; June expanded 17% at $1.38 billion; and July surged 27% at $1.35 billion.
The trend will continue to be stronger, as the recent friendly interactions between the two nations were positive," the sources commented.
While Chinese Foreign Minister Wang Yi was visiting New Delhi earlier this week, India and China agreed to increase their bilateral trade relations. According to the Ministry of External Affairs on August 19, both nations have also agreed to resume border trade through Lipulekh Pass, Shipki La Pass, and Nathu La Pass, and to "facilitate trade and investment flows through concrete measures."
The two [nations] are eager to enhance bilateral economic ties in the face of international trade uncertainty prompted by the US," said one official. Scrutiny of the data reveals robust Chinese demand for Indian petroleum products, farm products, and sea products, reflecting the scope for development in the second-largest global market.".
A second official stated, "The increase reflects the strengthening Indian demand for Chinese goods and the rising export competitiveness of India in spite of uncertainties in global trade. The consistent growth in exports also marks a slow rebalancing of trade between the two Asian nations, with India having long run a huge trade deficit." India's trade deficit with China was $99.2 billion during 2024-25.
This surge is a promising trend that can assist India to diversify its export base and solidify its foothold in one of the world's biggest import markets," the trade expert, who wished to remain anonymous, said.
The increase in exports in Q1 of FY26 was driven by robust performances in energy, electronics, and agri-based industries. Petroleum product exports almost doubled to $883 million (95.3% growth) and electronic products jumped to $521 million (202.7% growth), reflecting strong demand from Chinese industrial and consumer segments. Agricultural products posted great gains with oil meals posting $41.7 million (2656.1% growth), rice $32.2 million (1383.3%), and oil seeds $16 million (1791.7%).
The traditional industries also made their contribution to the drive, with organic and inorganic chemical exports at $335.1 million (16.3%), spices $234.5 million (21.9%), tea $8.9 million (93.9%), and gems and jewellery $11.5 million (72.7%). Growth was moderate in marine products (5.1%), mica, coal, and ores (3.0%), and ready-made garments (14.8%).
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