China has emerged as India's largest trading partner in FY 2025-26, surpassing the United States after four consecutive years at the top.
Bilateral trade between India and China reached around $151 billion, highlighting strong economic ties despite geopolitical tensions.
However, the development comes with a major concern, as India's trade deficit with China widened to a record $112 billion, driven by a sharp rise in imports.
India's exports to China grew significantly by over 36%, but imports also increased by around 16%, keeping the trade imbalance high.
Key imports include electronics, telecom equipment, and industrial components, reflecting India's continued dependence on Chinese manufacturing.
The shift in trade dynamics highlights both strong bilateral trade engagement and ongoing structural challenges for India in reducing import dependence and balancing trade.