India’s Exports to China Skyrocket 32% in Financial Year 2025, Driving Sharp Reduction in Trade Deficit
India’s merchandise exports to China have recorded a remarkable surge, registering a year-on-year growth of 32.83% during the April–November 2025 period. This robust performance, according to data released by the Commerce Ministry, signals a significant strengthening of bilateral trade and a positive shift in India’s export momentum.
The total value of merchandise exports to China reached USD 12.22 billion in the first eight months of the current financial year (FY26), up substantially from USD 9.20 billion recorded during the corresponding period of 2024.
The strong growth figure is more than just a headline number; it provides crucial insight into India’s overall trade strategy and its impact on the macroeconomic landscape.
Key Figures and Commodity Drivers
The upward trajectory was particularly pronounced in the latter half of the reported period, with monthly shipments peaking at USD 2.20 billion in November 2025. This monthly peak reflects sustained high demand from the Chinese market.
While raw materials like iron ore have historically dominated Indian exports to China—and saw a massive 70.23% growth in November exports overall—market analysts suggest that the composition of the trade basket is subtly shifting. The overall export growth in sectors like Electronic Goods (up 38.96%) and Engineering Goods (up 23.76%) in November 2025 indicates that China is likely sourcing a more diversified range of components and intermediates from Indian suppliers. This points toward the growing integration of Indian manufacturing into Asian supply chains, moving beyond traditional primary sector exports.
Impact on the National Trade Balance
The most significant extended dimension of this export triumph is its contribution to the national trade balance. The surge to China, coupled with a healthy rise in exports to the United States (up 21% year-on-year in November), acted as a powerful corrective force for the country’s overall deficit.
Government data shows that India’s overall trade deficit narrowed dramatically to USD 6.64 billion in November 2025, a massive improvement from the USD 17.06 billion deficit recorded in November 2024.
This sharp contraction was achieved as total exports (merchandise and services combined) for November 2025 reached USD 73.99 billion, growing significantly year-on-year, while total imports declined marginally to USD 80.63 billion.
The robust demand from China for Indian goods is now being viewed by policymakers as a key component in achieving sustained trade deficit reduction, enhancing economic stability, and boosting domestic industrial output. The challenge ahead for Indian exporters will be to maintain this momentum and further diversify their offerings to cement a more structurally balanced relationship with its largest goods trading partner.
