Amid steep tariff measures imposed by the United States under President Donald Trump’s Administration, India’s export landscape is undergoing notable changes. December records suggest that exports to China rose sharply, while U.S. exports have softened after the Trump administration’s tariff surge last year.
Exports to China surged 67% in December to $2 billion, in contrast to goods shipped to the U.S., New Delhi’s biggest export market, which dropped 1.8% to $6.8 billion, according to government data.
Among other countries, the U.S. has slapped the highest tariff on India, 50%, even more than China, triggering both trade and diplomatic relations between the two countries.
In the fiscal year ending March 2026, India’s exports to mainland China rose nearly 37%, while shipments to Hong Kong jumped more than 25%.
Earlier this week, India’s Foreign Secretary Vikram Misri met the Vice Minister of the International Department of the Communist Party of China, Sun Haiyan, in New Delhi to discuss the “progress made in stabilising and rebuilding bilateral ties with priority on business and people-centric engagements.”
Trade relations between the two countries are improving, following the September meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping at the Shanghai Cooperation Organisation summit. The sole purpose of this meeting was to share a vision of being partners and not rivals.
Recently, China has emerged as India’s largest goods trading partner, with $110.20 billion in business between April and December 2025, while $105.31 billion was with the U.S.
The widening trade deficit, with imports rising faster than exports, underscores ongoing challenges. India’s deficit expanded to roughly $25 billion in December, driven largely by stronger imports of electronics, fertilisers, and other goods.
India and the U.S. are engaged in ongoing discussions to finalise a bilateral trade agreement that could ease tariff pressures, but no firm deadline has been set.
