China Becomes India’s Top Trade Partner in FY26

China has overtaken the United States to become India’s top trading partner, with bilateral trade reaching a total of $151.1 billion For the financial year 2025-26 (FY26),This shift marks China’s return to the top spot for the first time since 2020-21, ending the US’s four-year tenure as India’s largest trading partner..

Trade Breakdown (FY26)

1. Total Bilateral Trade between India and China is $151.1 billion at present
2. Imports from China: Increased by 16% to $131.63 billion , Growth is driven largely by India’s heavy reliance on Chinese electronics, machinery & raw materials
3. Exports to China: Rose by 36.66% to $19.47 billion
4. Swelled to an all-time high of $112.16 billion, up from $99.2 billion in FY25

Comparison with the United States

The US, previously the top partner of India since FY22 & saw more moderate growth in its trade relationship with India during this period like Total Trade which is Approximately $140.2 billion in which calculated from $87.3B exports and $52.9B imports included ..

1. Exports to US , Grew marginally (0.92%) to $87.3 billion 
2. Imports from US, Increased by 15.95% to $52.9 billion
3. Trade Surplus, we can India’s surplus with the US declined to $34.4 billion from $40.89 billion in the previous year

Key Drivers of the Shift

1. Industrial Dependence like India continues to depend on China for critical sectors such as electronics, pharmaceutical ingredients (APIs) & industrial machinery 
2. While India-US trade remains robust, it has been impacted by reciprocal tariffs and slower export growth Meanwhile, trade with China has flourished despite ongoing border tensions

China previously held the position of India’s top trading partner from 2013-14 to 2017-18 and again in 2020-21,Government data for FY26 highlights that while India has seen record growth in exports to China, the massive surge in imports remains a point of concern for New Delhi’s trade balance ..

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