China’s economic dominance over India and widening trade deficit are matters of big concern; How to resolve them? Experts say…
New Delhi: China has increased India’s tensions as the data has revealed that we are heavily dependent on the Dragon in many sectors. This indicates China’s economic dominance. In the first half of the financial year 2025-26, China emerged as India’s largest import source. During this period, India’s trade deficit with China increased to $54.4 billion. This increase was primarily due to increased imports of goods such as electronics, machinery, and silver. This clearly points to India’s dependence on China.
India’s imports from China have increased
In the first half of the financial year 2025-26 (April-September), China remained India’s largest source of imports. During this period, India imported goods worth $62.89 billion from China, followed by the United Arab Emirates (UAE) in second place with $33.03 billion. Imports from China increased by 11.2% compared to the previous year. Imports from the UAE increased by 13.2%. Russia, the third-largest source, declined by 7.4% to $31.12 billion. The Economic Times (ET) quoted an official as saying that the increase in imports from the UAE was due to India’s trade agreement. Imports of certain components from China also increased.
Huge trade deficit with China
India’s total merchandise imports during this period increased to $375.11 billion from $358.85 billion last year. This increase reflects the country’s strong domestic demand and production activities. In particular, non-petroleum and non-gems and jewellery imports increased by 8.2% to $243.58 billion. This is an important indicator of domestic demand.
India’s trade deficit with China widened to $54.4 billion during April-September 2025-26, up from $49.6 billion in the same period last fiscal year. An official stated, “Our imports are higher than last year. We are examining detailed data.”
The widening trade deficit with China is a matter of concern. This occurs when a country buys more goods from another country and sells fewer.
India’s major import sources after China
After China, the United States, Iraq, Saudi Arabia, Hong Kong, and Singapore were also among India’s major import sources in the first half of 2025-26. It is noteworthy that India’s total merchandise imports have increased, indicating a strong economic recovery. However, the widening trade deficit with China is a matter of concern and requires the government’s attention.
The widening trade deficit with China is a complex issue. This means that India buys more goods from China than it sells. This situation could put pressure on India’s foreign exchange reserves. However, it is also true that some items imported from China, such as electronics and machinery, are vital to India’s own industries. Without these goods, India’s own production could be affected.
How to reduce trade deficit?
To reduce the trade deficit with China, India must focus on increasing exports. This means that India must produce products that are in demand in international markets. To do this, India must improve its manufacturing capabilities, raise quality standards, and create a favourable business environment for exports.
In addition, India should consider increasing self-reliance in sectors where it currently relies heavily on China, such as electronics and certain types of machinery. Analysing the reasons for the decline in imports from Russia is also important.
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