Aerial view of cargo ship and cargo container in port.
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India’s exports to China rose in December, while shipments to the US fell, as tough tariffs by President Donald Trump prompted New Delhi to look to alternative markets.
Exports to China rose 67% to $2 billion in December, while shipments to the United States, New Delhi’s biggest export market, fell 1.8% to $6.8 billion, according to government data released Thursday.
The US imposed a 50% tariff on New Delhi, the highest of any country, even higher than China, improving 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 grew by nearly 37%, while shipments to Hong Kong rose by more than 25%.
Earlier this week, Indian Foreign Minister Vikram Misri met Sun Haiyan, Vice Minister of the International Department of the Communist Party of China, in New Delhi. discussion “progress made in stabilizing and restoring bilateral ties, prioritizing business- and people-oriented actions.”
There were relations between the two countries dissolution Prime Minister Narendra Modi and Chinese President Xi Jinping met at the Shanghai Cooperation Organization summit in September and shared a vision of being partners rather than competitors.
China has emerged as India’s largest commodity trade partner, will do $110.20 billion in business between April and December 2025, outpacing the U.S. by $105.31 billion, according to data from India’s commerce ministry.
But Indian expansion Trade deficit with Beijing and the border disputes It turned into a dispute between the two. The country’s trade balance with China is at odds with the US
New Delhi has a trade surplus with Washington and a growing trade deficit with Beijing. Between April and December, the positive balance of India’s trade balance with the USA exceeded 26 billion dollars, the deficit with China was 81.7 billion dollars.
In FY 2025, India traded Goods with Washington for $131.84 billion and with its Asian neighbor, excluding Hong Kong, for $127.71 billion.
Scarcity, Tariffs and Diversification
India’s December merchandise trade deficit rose 21.4% to 25 billion dollars per year. In December, the country’s export of goods increased by 1.9%, import by 8.8% compared to a year ago.
However, the deficit was below the $27 billion forecast by a Reuters poll.
Exports registered a surprise 19.4% increase in November, with shipments to the US rising 22.6% on hopes of a possible deal.
India’s Commerce Secretary Rajesh Agrawal said on Thursday that New Delhi was “very close”. elaboration He reached an agreement with Washington, but refused to give him a deadline, according to domestic media.
Although the two sides have been negotiating for several months, no agreement has been reached. US Commerce Secretary Howard Lutnick podcast Last week, the India-US trade deal was said to have ended because Prime Minister Modi did not call President Trump.
“I made the deal. But Modi had to call President Trump. They weren’t comfortable with that, so Modi didn’t call,” Lutnick said.
The Indian side called these comments “inaccurate”.
US Ambassador to India Sergio Gore, who took over last week, said finalizing a trade deal with a major country like India “isn’t easy to get to the finish line, but we are determined to get there.”
Aiming to become an export powerhouse, India is looking to diversify its exports to offset the impact of US tariffs.
Agrawal said that the country is close to sign A long-awaited trade deal with the European Union is due this month, according to Reuters.
Since the announcement of the US tariffs, India has signed trade deals with the UK, Oman, and New Zealand, which will be signed in the first half of 2026.
India “has a well-diversified and flexible export footprint,” said SC Ralhan, president of the Federation of Indian Export Organizations, citing the UAE, China, the Netherlands, the UK and Germany as India’s top export destinations besides the US.
“This diversification is critical at a time when global trade routes are being reshaped by geopolitical conflicts, sanctions, shipping disruptions and strategic realignments,” he said.