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The Global Trade Research Initiative reported in April that China accounted for more than 30 percent of India’s industrial imports in fiscal 2025-26, with 66 percent of the $131.6 billion total clustered in electronics, machinery, computers and organic chemicals. According to the think tank, China supplies 43 percent of India’s electronics imports, 40 percent of machinery and computer imports, and 44 percent of organic chemical imports. “These are not discretionary purchases but core inputs that feed directly into India’s manufacturing ecosystem,” GTRI founder Ajay Srivastava said in the report.
A joint study by the Koan Advisory Group and the Institute of Chinese Studies released in September found that China supplied at least 80 percent of India’s imports across 71 electronics product lines in 2025-26, up from 44 lines in 2018-19. The analysis highlighted concentrated reliance on upstream components such as motors, cables, switching equipment and lithium-ion batteries, where China’s share reached 83.6 percent with imports more than doubling since 2021-22 to $3.9 billion. Electrical machinery alone accounted for $43.1 billion or 38 percent of the $112.1 billion bilateral deficit, the study showed.
A BBC News report published on October 5 detailed how policy measures including higher tariffs and quality standards have reduced imports of some finished goods such as toys by two-thirds since 2020 while boosting Indian exports in that sector. Yet the outlet noted that production in smartphones, solar equipment and industrial machinery remains largely assembly-based with heavy dependence on imported Chinese components. The BBC quoted Srivastava warning that China now supplies over 30 percent of India’s industrial imports and dependence on it for more than 100 critical products, with the imbalance worsening.
India assembles more than a quarter of the world’s iPhones but local value addition stands at only 6 to 30 percent depending on the model, an India Today examination of the Make in India programme found last year. In the solar sector, the country has expanded module manufacturing capacity but still relies on imported wafers, cells and production equipment largely from China, renewable energy consultant Uday Doshi told Outlook Business in September. Over 70 percent of active pharmaceutical ingredients used in India’s generic drug industry continue to be sourced from China, Reuters reported in a commentary on October 4.
The World Bank placed China’s share of global value-added manufacturing at 28 percent in 2025 compared with India’s 3 percent, a gap that underscores the structural challenges in bilateral trade. Exports to China have remained below $20 billion in recent years even as imports have more than doubled since fiscal 2021, according to government data compiled by the GTRI and other outlets. Analysts have pointed to opportunities in pharmaceuticals where an ageing Chinese population could open export avenues, though narrowing the deficit will require broader measures.
Government initiatives such as production-linked incentives and diversification efforts have shown results in semiconductors, where China’s share of India’s imports fell to 48.9 percent in 2025-26 from around 64 percent a year earlier, the Koan-ICS study indicated. Data tabled in parliament in August confirmed imports from China at $131.63 billion for the fiscal year, supporting key sectors including electric vehicles, clean energy and infrastructure. The pattern of captive supply chains means that growth in Indian exports in certain sectors can simultaneously increase the need for Chinese inputs, a Reuters analysis observed.
