India’s exports to China surge in December, shipments to U.S. decline
Aerial view of cargo ship and cargo container in the port.
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While India’s exports to China soared in December, shipments to the United States declined as President Donald Trump’s higher tariffs prompted New Delhi to focus on alternative markets.
Exports to China rose 67% to $2 billion in December, as opposed to goods destined for the United States, New Delhi’s biggest export market, according to government data released late Thursday.
The US imposed a 50 percent tariff on New Delhi; This is among the highest tariffs imposed on any country, even more so than China, and has wreaked havoc on both trade and diplomatic relations between the two countries.
In the first nine months of the fiscal year ending March 2026, India’s exports to mainland China increased by nearly 37%, while shipments to Hong Kong increased by more than 25%.
Earlier this week, Indian Foreign Minister Vikram Misri met with Sun Haiyan, Deputy Minister of the International Department of the Communist Party of China, in New Delhi. to dispute “Progress made in stabilizing and rebuilding bilateral relations, prioritizing business and people-oriented relations.”
Relations between the two countries have been thawing since Prime Minister Narendra Modi and Chinese President Xi Jinping met at the Shanghai Cooperation Organization summit in September, sharing a vision of being partners, not rivals.
China has become India’s biggest asset trade According to data from India’s Ministry of Commerce, the partner did business worth $110.20 billion between April and December 2025, surpassing the US at $105.31 billion.
But India’s growing trade deficit with Beijing and border disputes It became a point of contention between the two. The country’s trade balance with China contrasts sharply with the US
While New Delhi runs a trade surplus with Washington, its trade deficit with Beijing is growing rapidly. In the April-December period, India’s trade surplus with the US was more than $26 billion, while its deficit with China was $81.7 billion.
India in fiscal year 2025 traded Excluding Hong Kong, goods worth $131.84 billion with Washington and $127.71 billion with its Asian neighbor.
Deficit, tariffs and diversification
India’s December goods trade deficit rose It reached 25 billion dollars with an annual increase of 21.4%. While the country’s goods exports increased by 1.9% in December compared to the previous year, imports increased by 8.8%.
However, the budget deficit remained below the $27 billion estimate of a Reuters poll.
Exports posted a surprising 19.4% growth in November, while shipments to the US rose 22.6% in hopes of a possible deal.
New Delhi is “very close” to China, Indian Commerce Minister Rajesh Agrawal said on Thursday. conclusion According to local media reports, an agreement was made with Washington, but no deadline was given for this.
Although the two sides have been negotiating for months, no agreement was reached. US Secretary of Commerce Howard Lutnick podcast Last week, the India-US trade deal was said to have failed because Prime Minister Modi did not call President Trump.
“I arranged the deal. But Modi had to call President Trump. They were uncomfortable with that, so Modi didn’t call,” Lutnick said.
The Indian side described these comments as “wrong”.
US Ambassador to India Sergio Gor, who took over last week, said finalizing a trade deal with a major country like India “is not an easy task to get this to the finish line, but we are determined to get there.”
India, which aims to become an export powerhouse, is looking for ways to diversify its exports to compensate for the impact of US customs duties.
Agrawal says country is close sign A much-anticipated trade deal was struck with the European Union this month, according to a report by Reuters.
Since the US tariffs were announced, India has signed trade agreements with the UK, Oman and New Zealand that will be signed in the first half of 2026.
SC Ralhan, President of the Federation of Indian Export Organizations, stated that India has a “very diverse and resilient export footprint” and emphasized that, in addition to the USA, the UAE, China, the Netherlands, the UK and Germany are India’s most important export destinations.
“This diversification is especially critical at a time when global trade routes are being reshaped by geopolitical conflicts, sanctions, shipping disruptions and strategic realignments,” he said in a statement. he said.
