Deficit or Opportunity? India’s China Trade Puzzle
India’s trade relationship with china has long been defined by an imbalance. According to a recent ICRIER study, india imported goods worth $113.5 billion from china in FY2024–25, while exports stood at a mere $14.3 billion. The yawning $99.2 billion trade deficit reflects not just economic asymmetry but also India’s missed opportunities in key industries.But the study makes a compelling case: India has an untapped export potential of $161 billion to China. Unlocking this could redefine bilateral trade and position indian industries on stronger global footing.
Where india Can Bridge the Gap
Pharmaceuticals & APIs- India is the world’s largest supplier of generic drugs, yet china dominates APIs (Active Pharmaceutical Ingredients).
- Business Idea: Build clusters for API manufacturing with government incentives, reducing dependency on Chinese imports and boosting indian pharma exports.
- China’s aging population and rising wages create a gap in cost-effective apparel manufacturing.
- Business Idea: indian firms can target mid-range textile exports to Chinese retailers and e-commerce giants like Alibaba and JD.com.
- India can tap into China’s growing demand for processed food, organic produce, and seafood.
- Business Idea: Exporting mangoes, spices, rice, and marine products with branding focused on “authentic indian origin.”
- India has a global reputation in software, cloud services, and AI solutions.
- Business Idea: Position indian IT firms as backend partners for Chinese startups expanding globally.
- China leads in solar hardware, but india can supply services in installation, smart grids, and green hydrogen collaboration.
- Business Idea: Joint ventures with Chinese manufacturers to set up plants in india for re-export.
- Pre-COVID, thousands of Chinese students came to india for medical studies. Tourism and education remain undervalued.
- Business Idea: Revive bilateral educational programs, yoga retreats, Ayurveda-based wellness tourism.
Strategic Moves for indian Businesses
- Brand india in China: indian products often lack visibility in the Chinese market. A collective “Made in India” branding push could change perception.
- Leverage FTAs & Trade Corridors: Work through ASEAN, BRICS, and RCEP-adjacent agreements to access Chinese demand indirectly.
- Supply Chain Diversification: As Western countries “de-risk” from china, indian businesses can position themselves as alternative suppliers, then use china for scale manufacturing partnerships.
The Road Ahead
The $99.2 billion deficit isn’t just a problem—it’s an opportunity. With $161 billion in untapped export potential, india can recalibrate its trade with china by:- Focusing on value-added exports rather than raw materials.
- Building strategic bilateral partnerships in pharma, tech, and food security.
- Encouraging Indian SMEs to explore niche markets in China.