India is following a diversified strategy to boost exports to China by strengthening domestic capacities while reducing import dependence through diversification of its supplier base, as complete decoupling from Beijing is difficult since Chinese inputs support the country's industrial growth, a senior official said.
"While India may not have hard decoupling from China, it is creating its own capacity both in terms of having resilient supply chain and also in terms of increasing our own exports capacity," the official said.
The senior government official added that India primarily imports raw materials, intermediate and capital goods, such as auto components, electronic parts and assemblies, mobile phone components, machinery and related parts, and active pharmaceutical ingredients, which are used to produce finished goods for export and support domestic manufacturing.
1 April 2026
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"Whatever China is supplying is the backbone of India's production. Some consumer durables are also coming but are less in numbers," the official said.
India's exports to China rose about 37 per cent to USD 19.47 billion in 2025-26 from USD 14.25 billion in 2024-25. The exports stood at USD 0.71 billion in 1997-98.
On the other hand, imports from Beijing increased 16 per cent to USD 131.63 billion in 2025-26 from USD 113.44 billion in 2024-25. The trade deficit has risen from USD 99.2 billion in 2024-25 to USD 112.6 billion in 2025-26. Imports were just USD 1.11 billion in 1997-98.
The main export sectors where India has recorded health growth in exports during the last fiscal year include printed circuit boards, electrical appliances, telephone systems, shrimp, aluminium ingots, black tiger shrimp, vessels, and certain agri commodities.
However, there is a need to further widen the export basket to increase India's share in China's imports.
The import surge is in electronics, electrical machinery, pharmaceuticals ingredients, APIs, auto parts, telecom instruments, industrial machinery, computer hardware peripherals, organic chemicals, accumulator and batteries, plastic raw materials, residual chemicals, and bulk drugs.
"These all goods are ultimately going into our industrial process, as we are industrialising, imports will increase naturally," the official added.
The government is taking a series of measures to boost domestic manufacturing and the production-linked incentive scheme is a key step in that direction. The boost in manufacturing going ahead will help cut imports and increase exports.
The scheme is helping domestic businesses to create value chains and for that the industry needs capital goods and intermediate parts.
Further, to reduce import dependence on China, the government is in the process of identifying goods that are China-intensive and cost-competitive, and is examining whether Indian companies can source them from countries such as Taiwan, South Korea, Japan, and the European Union.
An Inter-Ministerial Committee (IMC) is there to monitor exports and imports regularly and it takes corrective measures in consultation with various stakeholders.
The composition of the IMC includes representatives from Department of Commerce, Department of Revenue, Department for Promotion of Industry and Internal Trade, Directorate General of Foreign Trade and Directorate General of Commercial Intelligence and Statistics.
