India China Trade
China was India's third-largest export destination in FY26, with exports reaching US$ 19.47 billion across 5,104 commodities.
Introduction
India and China, two of Asia's largest economies, share a long-standing relationship shaped by diplomatic engagement, growing commercial ties and regional cooperation. India was the first country outside the socialist bloc to formally recognise the People's Republic of China in April 1950, laying the foundation for India-China economic relations. Over the decades, the two countries have expanded engagement through trade, investment and institutional mechanisms, including the 1994 agreement to address cross-border taxation issues. Today, India China trade remains an important pillar of the bilateral relationship, with increasing focus on strengthening commercial cooperation, improving connectivity and fostering sustainable economic growth.
India-China Trade
- Bilateral trade between India and China in FY26 stood at US$ 151.104 billion against US$ 127.69 billion in FY25.
- In FY26, China stood as India’s third largest export destination with around 4.4% share in total exports for the year.
- China occupies the 23rd position in foreign direct investment (FDI) equity inflows into India with a cumulative FDI amount of Rs.16,162.25 crore (US$ 2.51 billion) from April 2000 to March 2026.
Major exports from India to China
- India’s export to China stood at US$ 19.47 billion in FY26 and US$ 14.25 billion in FY25.
- India exported 5,104 commodities to China in FY26.
- Major exported items from India to China include Engineering Goods (US$ 3.53 billion), followed by Electronic Goods (US$ 3.18 billion), Petroleum Products (US$ 2.46 billion), Iron Ore (US$ 1.59 billion), Marine Products (US$ 1.55 billion), Organic and Inorganic Chemicals (US$ 1.53 billion), Mica, Coal and Other Ores, Minerals Including Process (US$ 1.12 billion), and Spices (US$ 518.64 million) in FY26.
Major imports by India from China
- Imports from China to India stood at US$ 131.63 billion in FY26 and US$ 113.45 billion in FY25.
- India imported 7,914 commodities from China in FY26.
- Major items imported from China include Electronic Goods (US$ 49.21 billion), followed by Machinery, Electrical and Non-Electrical (US$ 24.51 billion), Organic and Inorganic Chemicals (US$ 8.19 billion), Artificial Resins, Plastic Materials, etc. (US$ 7.01 billion), Transport Equipment (US$ 5.91 billion), Non-Ferrous Metals (US$ 4.91 billion), Iron and Steel (US$ 4.07 billion), Chemical Material and Products (US$ 3.87 billion), Medicinal and Pharmaceutical Products (US$ 3.67 billion) and Machine Tools (US$ 2.48 billion) in FY26.
Recent Trends and Developments
- India and China agreed to resume border trade through the Lipulekh Pass from August 1, 2026, marking the reopening of the historic trade route after a six-year suspension. The move is expected to revive cross-border commerce, improve livelihood opportunities for border communities, strengthen regional connectivity and contribute to the gradual normalisation of bilateral economic relations.
- In July 2026, Foreign Secretary Mr. Vikram Misri visited Beijing and held high-level discussions with senior Chinese officials to deepen bilateral engagement. The talks covered trade and economic cooperation, people-to-people exchanges, and maintaining peace and tranquillity along the border, while reaffirming the shared vision of advancing mutually beneficial relations and creating a conducive environment for stronger commercial and investment ties.
- In July 2026, the Government of India approved 111 road projects worth Rs. 2,481.93 crore (US$ 289.07 million) under the Vibrant Villages Programme to provide all-weather road connectivity to 134 unconnected villages along the India–China border. The initiative is expected to strengthen border infrastructure, improve connectivity, facilitate tourism and local economic activities, and support the long-term socio-economic development of strategically important border regions .
- Senior officials from India and China held a fresh round of consultations in Beijing, with both sides noting positive progress in stabilising and rebuilding bilateral relations. The discussions, led by Joint Secretary (East Asia) Mr. Sujit Ghosh, were described as constructive and forward-looking, focusing on people-centric engagement, planned exchanges, and trade and commercial issues, including the early resolution of export control concerns.
- Prime Minister Mr. Narendra Modi met Chinese President Mr. Xi Jinping on the sidelines of the SCO Summit in Tianjin on August 31, 2025, where both leaders welcomed positive momentum in bilateral ties and reaffirmed that India and China are development partners. They underscored the importance of border peace, people-to-people exchanges, balanced trade, and cooperation on regional and global issues, while committing to managing differences through dialogue and mutual respect.
- On January 27, 2025, Foreign Secretary Mr. Vikram Misri met Chinese Foreign Minister Mr. Wang Yi in Beijing to advance the normalisation of India–China relations. The discussions focused on implementing leaders' consensus, enhancing mutual understanding, and resuming practical cooperation across various sectors.
- In July 2024, Syama Prasad Mookerjee Port, Kolkata, in partnership with Pacific International Lines (PIL), has inaugurated the China Calcutta Service (CCS) at the Kolkata Dock System. This direct weekly service from China to Kolkata aims to reduce transit times from Far East Ports, enhancing connectivity and efficiency for stakeholders.
- As of September 15, 2022, 33 projects (25 Sovereign, 11 Non-Sovereign) have been approved for financing of US$ 8.75 billion.
- New Development Bank (NDB) which has established its office in Shanghai, opened its India Regional Office in Gujarat International Finance Tec-City in June 2022. India is the biggest borrower in NDB with 19 projects approved with a commitment of US$ 6.92 billion as on August 31, 2022.
- A bilateral meeting between India and China was held at the third G20 Finance Ministers and Central Bank Governors (FMCBG) meeting at Gandhinagar on July 18, 2023. During the meeting, Union Finance Minister Ms. Nirmala Sitharaman met Mr. Liu Kun, Minister of Finance, People’s Republic of China. The Ministers discussed G20 Finance agenda and the state of their economies, inflation, and trade and recognized the importance of a good business environment for economic growth and development.
Investments and Economic Relations
- India and China are advancing efforts to strengthen their economic relationship by promoting mutually beneficial trade and investment cooperation, with discussions focusing on improving market access, addressing trade-related concerns and expanding commercial engagement. The renewed dialogue is expected to support a more stable business environment and facilitate long-term economic collaboration between the two countries.
- The resumption of border trade through the Nathu La, Lipulekh and Shipki La passes marks a significant step towards restoring cross-border commerce between India and China. The reopening of these historic trade routes is expected to improve regional connectivity, support border economies, strengthen supply chains and create new opportunities for businesses engaged in bilateral trade.
- Bilateral trade between India and China has continued to expand, rising from US$ 127.69 billion in FY25 to US$ 151.10 billion in FY26, reflecting the growing scale of economic engagement between the two countries.
- As of March 2026, China was ranked as the 22nd largest foreign investor in India, having made cumulative investments amounting to Rs.16,162.25 crore (US$ 2.512 billion) since April 2000.
- With increasing bilateral trade in the last few years, many Indian companies have started setting up Chinese operations to service both their Indian and MNC clientele in China. Apart from this, more than 100 Chinese companies have established offices/operations in India. Many big Chinese names in the field of machinery and infrastructure construction have won projects in India and have opened project offices in India.
Conclusion
India and China, two of Asia's largest economies, share a long-standing relationship shaped by diplomatic engagement, growing commercial ties and regional cooperation. India was the first country outside the socialist bloc to formally recognise the People's Republic of China in April 1950, laying the foundation for India-China economic relations. Over the decades, the two countries have expanded engagement through trade, investment and institutional mechanisms, including the 1994 agreement to address cross-border taxation issues. Today, India China trade remains an important pillar of the bilateral relationship, with increasing focus on strengthening commercial cooperation, improving connectivity and fostering sustainable economic growth.
Contacts
- Embassy of India, Beijing, China
Mr. Pradeep Kumar Rawat (Ambassador);
Contact: amboffice.beijing@mea.gov.in,
Mr. Abhishek Shukla (Deputy Chief of Mission);
Contact: dcmoffice.beijing@mea.gov.in
Mr. Karthik Gurunathan Iyer (Counsellor, Political, Information and S&T);
Contact: cpol.beijing@mea.gov.in
Address: No.5, Liang Ma Qiao Bei Jie, Chaoyang, District, Beijing 100600 China
Tel: +86-10-8531 2500/2501/2502/2503
Website - www.eoibeijing.gov.in - Embassy of China in India
Ambassador: H.E. Mr. Xu Feihong
Address: 50-D, Shantipath, Chanakyapuri, New Delhi-110021.
Tel: +91-11-26112345
Email: chinaemb_in@mfa.gov.cn
FAQs
India exports to China are primarily driven by high-value manufacturing and industrial products. Engineering Goods, Electronic Goods and Petroleum Products were the top export categories in FY26, together accounting for a substantial share of India's exports to the Chinese market.
India China trade has continued to expand, with bilateral trade between India and China increasing from US$ 127.69 billion in FY25 to US$ 151.10 billion in FY26. China also remained India's third-largest export destination during FY26.
Engineering goods, electronics, petroleum products, chemicals, iron ore and marine products are among the key sectors supporting India China trade relations. These industries account for a large share of India's exports while also contributing to overall bilateral trade.
The Chinese market offers opportunities for Indian exporters through its broad demand for industrial, mineral and processed products. With India exporting 5,104 commodities to China in FY26, businesses have scope to diversify exports while benefiting from expanding India China trade relations and improving connectivity.
The demand for Indian products in China is concentrated in sectors that support manufacturing and industrial supply chains. Engineering Goods, Electronic Goods, Petroleum Products, Iron Ore and Organic and Inorganic Chemicals emerged as the highest-value export categories from India in FY26.
Recent initiatives, including discussions on market access, trade-related issues and the resumption of border trade, are strengthening India China economic partnership. These measures are expected to facilitate commercial engagement and improve the overall business environment.
The continued expansion of bilateral trade between India and China, along with efforts to improve market access and resume border trade, is expected to create new trade opportunities between India and China. India's diversified export basket including engineering goods, electronics, marine products, chemicals and spices provides a strong foundation for future export growth.
The growth of India China trade is supported by expanding bilateral commerce, stronger connectivity, high-level economic dialogue, border trade initiatives and continued cooperation on trade and investment. These developments are contributing to deeper economic engagement.
Indian businesses can strengthen India exports to China by leveraging improved connectivity, renewed border trade routes and expanding commercial engagement. The presence of Indian companies in China and ongoing dialogue on market access also supports business expansion.
India's diversified export basket of 5,104 commodities provides a strong foundation for expanding exports as India China trade relations continue to strengthen. Improved market access, the resumption of border trade and ongoing commercial engagement are expected to create opportunities for a broader range of Indian products in the Chinese market.
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