New Delhi: China has overtaken the United States to emerge as India's largest trading partner during the first six months of the current financial year, with bilateral merchandise trade climbing nearly 29 percent to USD 91.76 billion, according to the latest Commerce Ministry data.
The development marks a shift in India's trade rankings, with China displacing the US, which was marginally ahead during the corresponding period of the previous financial year.
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In April-September 2025, India's bilateral trade with the US stood at USD 71.39 billion, slightly higher than the USD 71.24 billion recorded with China.
A year later, China has opened up a substantial lead, with bilateral trade exceeding India's trade with the US by USD 8.62 billion.
The sharp increase in India-China trade was largely driven by higher imports, highlighting India's continued dependence on Chinese goods and industrial supplies.
Imports from China jumped 27.82 percent to USD 80.34 billion during April-September 2026, compared with USD 62.86 billion in the year-ago period.
India's exports to China also registered strong growth, rising 36 percent to USD 11.41 billion from USD 8.38 billion a year earlier. However, the increase in exports was insufficient to offset the much larger import bill.
Consequently, India's trade deficit with China widened to USD 68.93 billion from USD 54.06 billion in the corresponding period last year, an increase of nearly USD 15 billion.
The figures underline a persistent imbalance in bilateral trade, even as New Delhi and Beijing explore ways to improve economic engagement.
The United States emerged as India's second-largest trading partner during the first half of FY27, with bilateral trade increasing 16.5 percent to USD 83.14 billion from USD 71.39 billion a year earlier.
Unlike China, however, the US remained a major market where India enjoyed a trade surplus.
Indian exports to the US rose 11.11 percent to USD 50.81 billion, compared with USD 45.73 billion in April-September 2025.
Imports from the US increased at a faster pace of 25.98 percent to USD 32.32 billion from USD 25.66 billion.
As a result, India's trade surplus with the US narrowed to USD 18.49 billion from USD 20.07 billion in the corresponding period of the previous financial year.
The contrasting trade patterns are significant. While India's commerce with China remains heavily import-dependent, its trade relationship with the US continues to generate a substantial export surplus.
India's trade performance across other major markets remained uneven during the first half of FY27.
Exports to Singapore surged 103 percent, while shipments to Tanzania jumped 122.5 percent. However, exports to the United Arab Emirates, the Netherlands and Saudi Arabia declined.
On the import side, purchases from Oman rose 210.9 percent, while imports from Brazil increased 143.13 percent.
Meanwhile, imports from the UAE, Saudi Arabia and Switzerland registered declines.
The latest figures come amid efforts by India and China to improve bilateral relations following years of diplomatic and strategic tensions.
Commerce and Industry Minister Piyush Goyal said on October 14 that India was working towards rebuilding relations with China, although the process remained unfinished.
Commerce Secretary Rajesh Agarwal also confirmed that the two countries were engaged in discussions on trade-related issues.
"There are discussions going on on both sides on trade issues also...constant discussions will help improve the trade ties between the two countries," Agarwal told reporters.
The growing trade volumes suggest that economic engagement between the two Asian economies remains substantial despite their geopolitical differences.
However, China's return to the top position also brings India's widening trade deficit into sharper focus, raising questions about the country's ability to diversify imports, strengthen domestic manufacturing and expand its export presence in the Chinese market.
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The US had been India's largest trading partner for four consecutive financial years, from 2021-22 to 2024-25. China had already reclaimed the top position for the full financial year 2025-26, with bilateral trade reaching USD 151.1 billion. The latest figures therefore show China consolidating that lead rather than overtaking the US for the first time this year.
The Commerce Ministry's October 15 trade release confirms the latest export and import trends.
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