China has officially overtaken the US to become India’s largest trading partner in 2025-26, with bilateral trade soaring to $151.1 billion, even as India’s trade deficit with Beijing reached a record-breaking $112.6 billion.
Illustration: Uttam Ghosh
Key Points
- China has surpassed the US to become India’s largest trading partner in 2025-26, with bilateral trade reaching $151.1 billion.
- India’s trade deficit with China significantly widened to an all-time high of $112.6 billion in 2025-26.
- Indian exports to China saw a substantial rise of 36.66 per cent, reaching $19.47 billion, while imports from China increased by 16 per cent.
- The US, which was India’s largest trading partner for four consecutive years, saw marginal growth in India’s outbound shipments and a decline in India’s trade surplus.
- Historically, China was India’s top trading partner from 2013-14 to 2017-18 and again in 2020-21, before the US took the lead in 2021-22.
China has overtaken the US to emerge as India’s largest trading partner in 2025-26, with bilateral trade reaching $151.1 billion, while the country’s trade deficit with Beijing widened to $112.16 billion during the period, government data showed.
The US was India’s largest trading partner for four consecutive years till 2024-25.
Trade Dynamics with China
India’s exports to China rose 36.66 per cent to $19.47 billion during the last fiscal year, while imports increased 16 per cent to $131.63 billion. The trade deficit swelled to an all-time high of $112.6 billion in 2025-26 as against $99.2 billion in 2024-25.
US Trade Performance
On the other hand, the country’s outbound shipments to the US grew marginally 0.92 per cent to $87.3 billion during the last fiscal year, while imports increased 15.95 per cent to $52.9 billion. The trade surplus declined to $34.4 billion in 2025-26 from $40.89 billion in 2024-25.
Historical Context and Other Partners
According to commerce ministry data, China was India’s top trading partner from 2013-14 till 2017-18 and also in 2020-21.
Before China, the UAE was the country’s largest trading partner. The US has been the largest partner since 2021-22.
The major trading partners with which India recorded negative exports growth in 2025-26 include the Netherlands, the UK, Singapore, Bangladesh, Saudi Arabia, Australia, France, South Africa, and Malaysia.
However, exports to the UAE, Germany, Hong Kong, Italy, Nepal, Brazil, Spain, Belgium, and Vietnam registered positive growth last fiscal year.
The major trading partners with which India recorded negative imports growth in 2025-26 include Russia, Iraq, Indonesia, Australia, Qatar, and Taiwan.
However, imports from the UAE, Saudi Arabia, Hong Kong, Switzerland, Singapore, Japan, Korea, Germany, Thailand, and Malaysia registered positive growth in the last fiscal year.
